Tax Preparers Say IRS Stimulus Snafu Fixed for Millions

A woman sits at her dining room table with laptop and financial reports doing her monthly budget. She is writing down budgets as she works on her computer to do monthly finances, pay taxes and save money for the future.

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The rapid but somewhat troubled efforts to send out the latest round of $600 stimulus payments continued Friday, with major tax preparation companies saying they had at least partially solved an IRS error that had jammed up direct deposits for some of their customers. 

TurboTax said Friday that it had resolved the account issues for “millions” of its customers, who should see their payments deposited Friday, including those who had received the “Payment Status #2” error. H&R Block said Friday that it had resolved the matter for its clients earlier in the week and had processed all stimulus payments. Jackson Hewitt said earlier this week that it was working to fix the issue, but did not immediately reply to a request for an update on Friday. 

“We have been working tirelessly with the Treasury and IRS to get stimulus payments to our customers,” TurboTax wrote in a blog post Friday. “We know how important these funds are for so many Americans and we regret that an IRS error caused a delay.” 

The IRS mistakenly sent direct deposit payments to more than 13 million closed or invalid bank accounts earlier this week, an error that affected taxpayers who filed through companies like TurboTax, H&R Block, and Jackson Hewitt last year. The IRS said on Thursday that it could not reissue payments that bounced back from such accounts, and that users of its “Get My Payment” website who received a "Payment Status #2 – Not Available," error would have to file their 2020 taxes to claim their payments.

TurboTax said some payments may take a few business days to process or post to bank accounts, and that changes may not always be immediately visible on the IRS Get My Payment tool.

The relief is arriving at a time when the pandemic and ensuing economic distress are growing more intense. The jobs recovery reversed itself, with the number of people on nonfarm payrolls dropping 140,000 in December, the first monthly decline since April, and COVID-19 deaths reached another single-day record of 4,085 on Thursday. Amid the distress, there’s optimism surrounding the potential for more stimulus, and people are here for it: 65% of voters said they supported monthly $2,000 payments for the duration of the pandemic, according to a survey released this week by progressive group Data For Progress.