Despite earlier guidance from the IRS, Jackson Hewitt customers affected by an IRS error in processing their $600 stimulus payments won’t have to file their 2020 taxes to get their money, though they could have to wait until Feb. 1.
Over the weekend the tax preparer said its work with the IRS and other federal officials had paid off and the IRS will “start processing stimulus payments when their systems come back online.” While this may not be until Feb. 1, at least it’s “weeks earlier” than if they had to file their tax returns first, the company said Sunday.
The IRS and tax preparers are scrambling after the agency inadvertently sent some stimulus payments to invalid or closed bank accounts, including temporary bank accounts that tax preparers established for customers when their 2019 tax returns were filed. More than 13 million taxpayers have been affected by the glitch, Jackson Hewitt said, citing estimates from industry sources.
“We are extremely disappointed that the IRS did not agree to solutions we recommended that could have rectified their error much sooner, but we are pleased that the hundreds of thousands of hardworking Americans impacted by this mistake will finally receive the relief they deserve,” Jackson Hewitt said in the statement.
TurboTax and H&R Block said they had resolved the issue for their customers last week.
The IRS previously said that because of the bank errors, people who saw “Payment Status #2 - Not Available” when they used the agency’s online Get My Payment tool would have to claim them by filing for a “Recovery Rebate Credit” on their 2020 tax returns. But tax preparers, fielding complaints from frustrated customers, have been working with the agency to re-issue the payments, and by Friday the IRS was saying many of these payments would be redirected to the correct accounts. People who didn’t have an issue with their bank accounts saw their payments post as early as Jan. 4.
The agency will re-issue affected payments later this month either as paper checks or direct deposits, the IRS said in a statement on Sunday.
“The IRS regrets the inconvenience caused by this situation,” the statement said.