We know this is a frustrating and confusing time. There is likely conflicting information in various sources because the issue is ever-evolving as companies like TurboTax work with the U.S. Treasury and the IRS to find the best and quickest solution to get payments into the hands of Americans.
To answer your specific questions:
- Due to an error on the part of the IRS, some payments were sent to accounts that are no longer open, even though ultimate customer bank account data was previously transmitted to the IRS in the first round. As required by law, those payments were rejected by the bank that received them as the law doesn't allow for the re-routing of payments to a different account even when it belongs to the same taxpayer. The IRS is working to make a second attempt to deliver many of these payments to those accounts. If they are unable to deliver on the second attempt, they will then attempt to mail a check. If you have not received your payment by the time filing season opens in late January, then you will claim the payment on your tax return. Please do not submit your return prior to that date (which is still yet to be determined)
- There wasn't a selection process and it seems random because in many cases it was. The error wasn't specifically limited to any particular set of taxpayers. It did involve many that used refund transfer services (at any provider) because of the nature of the way those payments work using intermediary accounts which are typically closed immediately after receipt of the funds.
We are happy to share that TurboTax customers who were affected by the IRS processing error that delayed some stimulus payments should begin seeing deposits into their accounts as soon as January 8, 2021.
This update may not be reflected in the Get My Payment tool at the IRS due to the focus on efforts to distribute the payments.
These payments will be distributed to the account listed for your federal refund on your 2019 tax return. If you did not have a refund in 2019, did not receive your 2019 refund via direct deposit, or did not file a return, the IRS may not have your direct deposit information and you should expect to either receive a check or to claim the payment on your 2020 tax return.
If you do not see a payment either in your bank account or your mailbox by January 15, 2021, you should claim your payment via the Recovery Rebate Credit on your 2020 tax return. Please hold off filing returns until after this date to ensure that you are preparing the most accurate return possible.
If you should need to claim the credit on your tax return, you are encouraged to file early (but after January 15) to receive these funds as quickly as possible. In TurboTax, you will enter information about the credit near the end of the interview in the Final Review section of the program.
More information about the payments and any additional updates can be found at the following links:
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