Millions of incentive payments for TurboTax customers and others sent to wrong accounts

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The payments – worth up to $ 600 per taxpayer and $ 600 for each of their family members – were part of the most recent Covid relief package signed into law in late December.

The IRS began issuing direct deposits of those payments on Dec. 29 and says 100 million have already been completed.

But according to Intuit TurboTax spokesman Ashley McMahon, “millions of payments have been sent to the wrong accounts, and some may not have received their stimulus payment.”

According to a source in the banking sector, 13 million people may have been affected.

The IRS said Friday it was taking immediate steps to redirect stimulus payments to the appropriate account for those affected.
“For those taxpayers who have checked Get My Payment and have received a response indicating that a direct deposit should be made to an account they don’t recognize, the IRS advises them to keep checking their bank accounts for deposits,” the agency advised.

The people most likely to be affected are those who have taken advantage of repayment loans or similar products. In those cases, their incentive payments may have been forwarded to the temporary bank account set up by the online tax prep company they used when their 2019 tax return was filed.

It may also have affected some people who switched banks in the past year, and the IRS has not yet registered their new checking account.

Earlier this week, the IRS attributed the error to the speed with which the new law required the agency to issue the second round of Economic Impact Payments.

For anyone who doesn’t receive their incentive payment before filing their 2020 tax return, the IRS advises them to claim the refundable chargeback credit. The credit is awarded for the same amount as the incentive payment for which you are eligible. With refundable credits, your tax liability will be reduced dollar by dollar, and if it exceeds your tax liability, the rest will be sent to you as a refund.
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Friday morning early, TurboTax said its customers will likely see their instant incentive payments deposited soon.

“Stimulus payments will begin rolling out Jan. 8 for millions of our clients affected by the IRS flaw,” the company wrote on its blog. “We expect most of these payments to be available that day, but it may take several business days for the banks to process.”

TurboTax said it will email customers when their payments have been deposited.

More information from the IRS on the status and procedures for receiving your incentive payment can be found here and here.

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