Missing stimulus aid could arrive by Feb. 1

IRS notifies clients of some tax preparation companies of delay

Some Jackson Hewitt customers who have yet to receive their second stimulus payments could see that money after all by Feb. 1.

The tax preparation firm confirmed Monday that the Internal Revenue Service will start processing some payments once their systems come back online.

The Economic Impact Payments in question had been sent by the IRS to closed or incorrect bank accounts during the latest stimulus rollout that began Dec. 30.

The IRS has been under increasing pressure to get more money quickly into the hands of financially vulnerable consumers.

A bipartisan group in Congress sent a letter Monday to IRS Commissioner

Charles P. Rettig to “express concern about the IRS’S decision to require people who have not received their EIP to wait until they file their 2020 taxes.”

Congress members have heard plenty from angry constituents about stimulus delays.

“At a time when millions of Americans are financially vulnerable and need immediate help due to the economic downturn caused by the coronavirus pandemic, it is vital that the IRS does everything in its power to get these payments out to the people who need them most without delay,” according to the letter, which was signed by U.S. Rep. Fred Upton, R-ST. Joseph, and others.

Congress passed the latest COVID-19 relief package Dec. 21, which included $600 direct payments and more to nearly all Americans based on income limits.

More money on the way

Customers of companies, including Jackson Hewitt, H&R Block and Turbotax, had voiced warnings about trouble last week.

Many times, the customers had taken out refund advances or agreed to have their tax preparation fees taken out of their tax refunds.

The bank accounts were set up by tax preparation firms — and later closed — as part of that process. But their stimulus money wasn’t getting to them now.

“By law, the financial institution must return the payment to the IRS. They cannot hold and issue the payment to an individual when the account is no longer active,” the IRS said as news broke about the glitch.

I reported about this problem early on Jan. 5 as readers complained to me about seeing wrong bank accounts show up when they researched an IRS online tool called

“Get My Payment.”

The IRS issued a statement on Jan. 10 that noted that the agency is taking “additional steps to get the second Economic Impact Payments to more eligible taxpayers.”

“Following extensive work and discussions with our industry partners,” the IRS said, “the IRS will reissue payments for taxpayers who did not receive the second Economic Impact Payment in instances where the bank account identified in our records has been closed.”

The IRS continued: “Payments will be issued directly from the government later this month, within weeks of the law being enacted. For people in this group, payments may be issued either as a paper check or as a direct deposit. Taxpayers do not need to take any action or call; this will be done automatically. The IRS regrets the inconvenience caused by this situation.”

Watch your mail or bank account

On Monday, Jackson Hewitt — which has offered tax preparation services inside Walmart stores, among other services — said its customers who saw delays will receive their second round of stimulus payments by Feb. 1 and much earlier than if they had to wait to claim the Recovery Rebate Credit on their 2020 federal income tax returns.

“Jackson Hewitt always fights for its clients and the situation of millions of taxpayers not having their second stimulus payment due to an IRS error was no exception,” according to a company statement.

“We considered this chain of events absolutely unacceptable and worked tirelessly over the past week with the highest levels of the U.S. Treasury Department, the IRS, and other parts of the federal government to find a solution that ensured our customers would get what they were owed as quickly as possible.”

The IRS has not commented on what error was made or how the situation could have been addressed earlier.

Tax filers can go to Irs.gov/eip for information or check your payment status at Irs.gov/getmypayment.