The Internal Revenue Service and the Treasury Department are beginning to send nearly 4 million economic impact payments by prepaid debit card, instead of by paper check or direct deposit.
The IRS had trouble with some direct deposits because it was relying on information from taxpayers’ 2018 and 2019 tax returns, and in some cases the money went to temporary bank accounts set up by tax prep chains. Paper checks are starting to go out, but they take longer. The prepaid debit cards promise to provide more convenience, but if they get lost in the mail, that could pose problems as well for people eagerly awaiting their economic impact payments.
Jason Wenk is the founder and CEO of Altruist, a wealth management platform built for independent advisors. With more than 25 years of experience in financial services and technology, he has worked across the industry as a quantitative analyst, financial advisor and fintech founder.
Peter Rodes is vice president of innovation and advisory services, for RGAX, the transformation engine of Reinsurance Group of America, Incorporated (RGA). Based in Chicago, Peter is a member of RGAX’s Emerging Solutions team, with a global role in developing novel and/or disruptive approaches to engaging with life and health insurance consumers to enable them to live healthier, longer, and more financially secure lives. Peter joins RGAX with more than 25 years of experience in health care, marketing and insurance.
As Program Manager, Global Product Portfolio Management for RGAX, the transformation engine of RGA Reinsurance Company, Eva Goldstein has global responsibility for RGA’s product framework, helping RGA and RGAX launch and scale industry-leading products and services. Based in Toronto, Eva brings more than 20 years of industry experience and a deep knowledge of both traditional and non-traditional parts of the business to her role, including local and global business development, alternative distribution, group healthcare, and most recently, strategic partnership management for RGAX.
The Treasury said recipients can use the so-called EIP Cards to make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees. They can also check their card balance online, by mobile app, or by phone without incurring fees. The EIP Card can be used online, at ATMs, or at any retail location where Visa is accepted. The free, prepaid card comes with the kinds of consumer protections available to traditional bank account owners, including safeguards against fraud, loss and other problems.
“Treasury and the IRS have been working with unprecedented speed to issue Economic Impact Payments to American families,” said Treasury Secretary Steven T. Mnuchin in a statement Monday. “Prepaid debit cards are secure, easy to use, and allow us to deliver Americans their money quickly. Recipients can immediately activate and use the cards safely.”
Under the $2 trillion CARES Act that Congress passed in March in response to the economic fallout from the coronavirus pandemic, the IRS and the Treasury have been sending out payments of $1,200 to individual taxpayers, $2,400 to couples, plus an extra $500 for each of their dependent children.
The Treasury said it has already sent more than 140 million economic impact payments worth $239 billion to Americans by direct deposit to accounts at financial institutions, Direct Express card accounts, and by check. The Treasury-sponsored EIP Card is another way to distribute the money efficiently and securely to eligible recipients and their families. EIP Cards are being sent to qualified individuals who don’t have bank information on file with the IRS, and whose tax return was processed by either the Andover or Austin IRS Service Center.
The Treasury’s financial agent, MetaBank, will mail out the EIP Cards to eligible recipients starting this week. Each mailing will include instructions on how to activate and use the card.
The EIP Card is part of the Treasury’s larger U.S. Debit Card program, which offers prepaid debit card services to federal agencies for electronic delivery of non-benefit payments. MetaBank was picked as the Treasury’s financial agent for the U.S. Debit Card program in 2016, after a competitive selection process by the Treasury’s Bureau of the Fiscal Service.
For more information about the EIP Card, click here. For more details about economic impact payments, click here.
