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IRS says misrouted stimulus payments now reaching taxpayers


Millions of misdirected stimulus payments are reaching taxpayers after the IRS and tax return software companies fixed a problem that initially sent the money to temporary bank accounts that were inaccessible to those awaiting deposits to hit their personal accounts.

“IRS tax industry partners are taking steps to redirect stimulus payments to the correct taxpayer account for as many people as possible,” said an IRS statement issued Friday.

Intuit, the company that makes the popular tax prep software TurboTax, indicated on Twitter that the money — up to $600 per person — was being sent to TurboTax users whose payments were initially misdirected to temporary accounts used by the company.

It also blamed the IRS for the hitch, which has delayed delivery for more than a week in some cases.

“Stimulus payments will begin to be deposited today, 1/8/21, for millions of our customers affected by the IRS error,” Intuit’s tweet said. “We expect most of these payments to be available today, but banks could take a few business days to process.”

Other tax prep companies were also involved.

The IRS has sent more than 100 million payments through direct deposit.

The misrouted payments affected millions of taxpayers and their dependent children, and the IRS had initially advised them that they’d have to file their 2020 tax returns to claim the payments. The money is technically a credit on their tax return.

Congress directed swift distribution of the stimulus payments through pandemic economic relief legislation enacted Dec. 27, and the money is supposed to be sent by Jan. 15. The IRS and Treasury Department issued a statement Dec. 29 indicating that the first payments were landing that night in taxpayers’ bank accounts.

But for some, the problem of temporary accounts used by tax preparers before they send customers their refunds re-emerged. There was a similar glitch with a first round of payments in 2020.

However, the latest fix to the problem isn’t universal. Some taxpayers might still have to file their 2020 returns to claim their payments, according to the IRS.

“Taxpayers in this situation are urged to file electronically with direct deposit to ensure their tax refund – and their stimulus payment – reach them as soon as possible,” the IRS statement said.

The agency has yet to announce when taxpayers can begin filing their 2020 returns this year, but tax filing season for individuals typically begins in late January.

In addition to direct deposit, the IRS is sending out payments via paper checks and debit cards.

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