TurboTax says it expects stimulus payments to be deposited in correct bank accounts after 'IRS error'

Tax-prep software giant TurboTax is telling customers that some people may not have received their stimulus payment because of an "IRS error" but that they expect the issue to be corrected "within days."

"The IRS recently began issuing a second round of stimulus payments to those eligible. Unfortunately, because of an IRS error, millions of payments were sent to the wrong accounts and some may not have received their stimulus payment," TurboTax said in a blog post on its website Wednesday and in an email to customers.

"We have been working tirelessly on a solution with the Treasury and the IRS. As a result, our expectation now is that within days the error will be corrected and stimulus payments will begin being deposited into the correct bank accounts," the company added. "We have also re-confirmed with the IRS that they have all of the correct banking information for our customers." 

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A coronavirus relief package enacted in late December provides for payments for most Americans of up to $600 per adult and per child. Individuals with income of up to $75,000 and married couples with income up to $150,000 are eligible for the full amount, and the payment amounts phase out above those thresholds.

The IRS has already sent out many of the payments electronically. Still, millions of Americans have yet to receive their payments, and some of them have taken to Twitter to criticize the IRS and tax-prep services such as TurboTax and H&R Block.

The IRS said in a question and answer document earlier this week that because of the speed with which it is required to issue the payments, some payments may have been sent to inactive or unfamiliar bank accounts. In cases where payments were sent to inactive accounts, the banks cannot keep the payments and have to return them to the IRS.

A spokesperson for Intuit, which owns TurboTax, said earlier in the week that the agency was working with the IRS to help people get their payments as soon as possible.

H&R Block said earlier this week that the IRS determines where payments are sent and that it some cases, the $600 payments were sent to different accounts than the earlier round of stimulus payments were sent to in the spring. H&R Block said it has processed millions of payments to customers' bank accounts and their prepaid cards with the company, and it provided phone numbers for customers to call if the IRS's "Get My Payment" web tool shows an unfamiliar bank account number.

Under the coronavirus relief law, the IRS has to issue payments by Jan. 15. People who are eligible for stimulus payments but do not receive them, or who received amounts that are smaller than what they are entitled to, can claim them as a credit when they file their 2020 tax returns this year.