Why Incentive Money Was Delayed for 13 Million People: Live Updates

People in New York are waiting in front of a store to make cash incentive checks.
Credit…Sarah Blesener to The New York Times

The federal government has only just begun sending out a second round of incentive payments, and many are already waiting a little longer than expected for their money.

Many payments have been sent to inactive or temporary accounts that taxpayers do not have access to. It’s unclear how many people will be affected, but tax preparation firm Jackson Hewitt said the Revenue Service sent payments to more than 13 million bank accounts that were no longer open or valid.

“Because the law required the IRS to issue a second round of economic impact payments, some payments may have been sent to an account that is closed or inactive,” the agency said in a statement Tuesday.

Companies like TurboTax, H&R Block and Jackson Hewitt occasionally set up temporary invoices for customers when making returns. For example, customers who choose to deduct preparation fees from their refund may be issued with one of these invoices, allowing the tax firm to take out part of it and then pass on the rest. After that, the accounts are usually inactive – but can still link to taxpayers in the IRS records. Payments sent to inactive accounts must be returned to the Treasury.

People who don’t get their payments right away should apply for a so-called recovery refund loan for their 2020 tax return, the IRS said. (The credit can be found on line 30 of the 2020 Form 1040 or Form 1040-SR.)

Taxpayers can use the IRS Get My Payment tool to check the status of their incentive payment. If you do not recognize the account number receiving the payment, it may be one of the temporary accounts.

Tax preparation companies said they are working to get payments to customers.

According to H&R Block, incentive payments are already transferred to customers’ bank accounts and with a prepaid debit card to certain customers. A TurboTax spokesman said the company is working with the IRS to help taxpayers get their payments as soon as possible. And Jackson Hewitt suggested on his website that customers consider including a 2020 tax rebate.