The following applies to our tax clients who:
1) filed a 2019 return and had funds direct deposited
- and -
2) opted to have tax preparation fees taken out of their refund in lieu of upfront payment.
Why is the stimulus payment delayed?
The delay is due to an IRS error. Stimulus funds were sent to the first account on the tax return without verification. When you opt to have preparation fees taken from your refund, the first account on your return is a “pass through” account held by a bank that facilitates this method of fee payment. The IRS states that any financial institution that receives stimulus funds will return those funds to the IRS. The IRS will then reissue payments by mail to the taxpayer address they have on file.
Pass through account explained:
When you select to have your preparation fees taken out of your refund, the IRS sends your money to a bank first. That bank acts as a neutral third party ensuring there are no discrepancies in the amounts to be distributed to the tax preparer and the taxpayer. Because this pass through account is where your tax refund first arrived, the IRS automatically sent your stimulus there as well. There is no account verification before funds are distributed.
Did I approve having my fees taken from my refund and having a bank involved?
Refer to your 2019 tax documents. Look for a page titled "Bank Product Information". If you did not pay upfront, this would have been your only option.
Why did the bank send my money back instead of sending it to me?
As required by law, stimulus payments must be sent directly to the intended recipient. While money from tax returns may be distributed by third party financial institutions, stimulus funds are not permitted to be handled as such. The bank is simply fulfilling its legal obligation to return any stimulus funds to the IRS.
Can I update my information online?
At this time, the IRS is not allowing taxpayers to update any information online. If the IRS cannot get your money to you via direct deposit or mail, you will receive a credit on your 2020 taxes.
Recovery Rebate Credit
Generally, this credit will increase the amount of your return or decrease the amount you owe by the amount of the stimulus. Make sure we know to include this credit when you file your 2020 taxes.
When will I get my money?
The IRS link below will take you to a page where you can enter your credentials and get more information.
You will be required to enter:
1) Social Security Number
2) Date of Birth
3) Street Address and Zip Code used on your most recent tax return
Will I get a debit card or a check?
Please see IRS website above. Enter credentials for more information.