IRS rushes to fix error that sent millions of stimulus payments to wrong bank accounts

But some taxpayers using the “Get My Payment” tool on the IRS website to track their stimulus relief are seeing that the money was deposited in a bank account they don’t recognize.

The IRS linked the issue to temporary bank accounts that were set up for refund loans or other banking products from such tax preparers as Turbo Tax, Jackson Hewitt and H&R Block.

“The IRS and tax industry partners are taking immediate steps to redirect stimulus payments to the correct account for those affected,” the IRS said in a statement, adding: “This is not an indicator of fraud.”

In a blog post about the stimulus payment glitch, TurboTax said it had been working with Treasury and the IRS to correct this issue, saying that as of Friday, stimulus payments were being deposited into the bank accounts of its millions of customers affected by the error.

“We expect most of these payments to be available that day, but banks could take a few business days to process,” the post said. “Payment will be deposited into the same bank account that customers received their 2019 tax refund.

TurboTax said customers expecting a stimulus payment will get an email about the deposit. For more stimulus information, Turbo Tax is directing customers to turbotax.intuit.com/coronavirus.

“Unfortunately, because of an IRS error, millions of payments were sent to the wrong accounts and some may not have received their stimulus payment. We have been working tirelessly with the Treasury and IRS to get stimulus payments to our customers,” the company said. “We know how important these funds are for so many Americans and we regret that an IRS error caused a delay.”

In a tweet, H&R Block said, “The IRS determines where second stimulus payments were sent, and in some cases, money was sent to a different account than the first stimulus payment last spring.”

H&R Block said it resolved the issue for its clients earlier this week, with customers receiving their stimulus payments via direct deposit or check or onto their Emerald Prepaid Mastercard.

Customers who have still not received their stimulus money are advised to call 1-800-HRBLOCK (472-5625). Questions may also be sent via Twitter to @HRBlockAnswers but don’t include personal information. “We have automated tools and live expert help ready to assist,” the company said in an emailed statement.

“We recognize how important these stimulus payments are to our clients and are working tirelessly with our bank partner and the U.S. Treasury to swiftly find a solution to distribute this money as quickly as possible,” Jackson Hewitt said in a Facebook post.

The IRS said that people who see their direct deposit payment going to a bank account they don’t recognize on the “Get My Payment” tool should continue monitoring the tool and their bank account for the stimulus deposit.

The agency also cautioned that “account numbers and potential deposit dates may not display an account number” as they work to correct this issue.

The glitch is similar to the one that happened with the first round of $1,200 stimulus payments this spring. People who filed their taxes via H&R Block, TurboTax and other services were unable to get their payments because the IRS did not have their direct deposit information on file.

The second stimulus payment provides up to $600 for individuals and $1,200 for couples filing jointly, as well as an extra $600 per qualifying child under 17. Payments are being sent three ways: automatically by direct deposit, via a mailed check or on a prepaid debit card.

Under the second stimulus package, the Treasury Department has until Jan. 15 to get out the $600 payments. If payments can’t be direct-deposited or mailed by then, people will have to wait to get their money when they file their 2020 tax returns.

Refunds for tax returns claiming the Earned Income Tax Credit (EITC) cannot be issued before mid-February, according to the IRS. This means people claiming the EITC, which benefits low- and modest-income households, may have to wait even longer to get their stimulus payments.

Both rounds of the stimulus relief are actually advanced credits and will appear on the federal tax form as a “Recovery Rebate Credit.”

Heather Long contributed to this report