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.
Jamie Topolski currently is the Director of Alternative Payment Strategies at Fiserv. He is focused on delivering a cost-effective, comprehensive and integrated solution for clients migrating from magnetic stripe to EMV™ chip cards. Jamie currently serves on the Smart Card Alliance Payments Council Steering Committee and is the Vice Chair of the EMV Migration Forum Steering Committee.Previously, Jamie served on the EMVCo Board of Advisors and was the Manager of Global EMV Programs for Discover Financial Services. Jamie received his Bachelor of Arts degree from Duke University and Master of Business Administration from the Booth School of Business at the University of Chicago.
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Omair Taher is a senior associate in Grant Thornton LLP’s Washington National Tax Office. He monitors legislative and regulatory tax developments and provides Grant Thornton’s clients with critical information related to those developments through alerts, thought leadership, webcasts, and presentations.
Dustin Stamper is the Tax Legislative Affairs practice leader and a managing director in Grant Thornton LLP’s Washington National Tax Office. He monitors tax legislative and regulatory developments, and identifies planning opportunities and challenges for Grant Thornton’s clients.
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.
