NEACH has compiled a list of Economic Impact Payments (EIPs) FAQs based on the latest information we have. As things continue to be fluid, the information below is subject to change. As we receive additional information, we will be updating these FAQs. Feel free to reach out to NEACH with any questions you may have. NEACH has also compiled Economic Impact Payments (EIP) Risk Management and Compliance Implications.
1. How will the Federal Government determine where to send the payments?
Determination of where the payments are sent is dictated by these two factors:
a. For those who filed a tax return for 2019 or 2018, no additional action needs to be taken.
b. People who aren't typically required to file a tax return
Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate Economic Impact Payments to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group and won’t need to take action.
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2. When will we see the next payments post to Recipient’s accounts?
The next ACH payments are scheduled to be transmitted with a settlement date of May 13th.
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3. What should financial institutions do to process exception items related to the EIP payments?
For exception items, such as payments attempting to post to closed accounts, invalid account numbers, etc., such items should be treated the same as financial institutions do for tax refunds. The EIPs may be validated by account number only. Financial institutions should not send Notifications of Change to the IRS for exception items. The IRS does not act on them. Once exceptions items are returned, the IRS will generate a check payment instead.
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4. Will there be a situation in which a recipient receives less than expected?
Payments are only going to be intercepted for taxpayers who owe child support, with the payments being offset through the Treasury Offset Program (TOP). Notice will be sent to the recipient who owes child support payments that the EIP payment will be intercepted. Additionally, the legislation has income criteria that may reduce the amount of a payment to specific recipients.
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5. How will these payments reflect the fact that they are Economic Impact Payments?
The recipient’s Social Security Number will appear in the individual ID field (as it does with tax refunds) the Company Name will be ‘IRS TREAS 310’, the Company Entry Description for these payments will be ‘TAX REF’, and will have nothing else to distinguish them as an EIP payment. Tax refund and EIP payments may be in the same batch. For EIP checks, there will be language in the memo line indicating that the check is an economic impact payment. U.S. Treasury checks can be verified provided that the financial institution has a valid routing transit number, check number and check amount. The verification website can be found here:
Treasury Check Verification Application
The Department of Treasury's Bureau of Fiscal Service is adding seven (7) new routing transit numbers for issuing tax refund payments in anticipation of the Economic Impact Payments. They can be found here.
NOTICE: Additional RTNs for IRS Tax Refunds and Electronic Payments
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6. Will the recipients be notified that the payments have been sent?
The IRS plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is sent. The letter will provide information on how the payment was made and how to report any failure to receive the payment.
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7. Will the stimulus payments be subject to reclamation as government benefit payments?
EIPs are not government benefit payments, they are tax credits, so they are not subject to reclamation in the event that the payee is deceased.
IRS Issues New Guidance for Economic Impact Payments (EIPs) Issued to Recipients who are Deceased, Incarcerated or are Non-Resident Aliens.
At the time the initial EIP Payments were submitted, the guidance at the time was that the payments are not subject to Reclamation. That fact remains true. On May 6, 2020, the Internal Revenue Service updated its guidance by advising that individuals who are incarcerated, are non-resident aliens, or who died before the payment was received are not entitled to an Economic Impact Payment. The individual or their representative should return the payment via check to the IRS. The IRS has not said that a bank or credit union has any obligation to return funds from an ACH Direct Deposit paid to a deceased, incarcerated or non-resident alien person.
We have broken it down by payment channel.
For ACH Direct Deposits: The RDFI is to post based on account number. If the RDFI is aware that the recipient is deceased, the RDFI is not obligated to return the payment, but may want to educate the survivor or representative that the IRS is looking for the portion of the payment applied to the deceased recipient to be returned via check. Below are the instructions to return the payment:
1) Submit a personal check, or money order immediately to the appropriate IRS location listed below.
| Maine, Massachusetts, New Hampshire, Vermont |
Andover Refund Inquiry Unit
310 Lowell St Mail
Stop 666A
Andover, MA 01810 |
| Connecticut |
Kansas City Refund Inquiry Unit
333 W Pershing Rd
Mail Stop 6800, N-2
Kansas City, MO 64108 |
| Rhode Island |
Philadelphia Refund Inquiry Unit
2970 Market St
DP 3-L08-151
Philadelphia, PA 19104 |
2) Make the check or money order payable to “U.S. Treasury,” and include 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.
3) Include a brief explanation of the reason for returning the EIP.
For Check Payments: Check payments become an Indorsement issue that the IRS is able to reclaim a payment for improper indorsement. For example, if the check is made payable to an individual or multiple individuals, all the individuals must indorse the check, which will not be possible if one or all are deceased. If a financial institution allows that check to be deposited with improper indorsement, the IRS could reclaim the funds. If all parties are unable to indorse the check, the financial institution cannot negotiate the check without risk of a claim. What the financial institution can do is educate the recipient(s) on how to return the check to the IRS.
How should these payments be returned to the IRS?
- If the EIP payment was a paper check, “void” should be written in the endorsement section on the back of the check. A note indicating the reason for the return of the check should also be included, and sent to the appropriate IRS location contained in the link below.
https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more
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8. How can people who don't normally file tax returns enroll for economic impact payments?
The IRS has announced the launch of a new website for non-filers to enroll for EIPs. Access the link below. IRS Non-Filers: Enter Payment Info Here
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9. How can I track my EIP?
The IRS began sending the first round of ACH Payments on Friday, April 10th, with a settlement date of April 15th. There will be two subsequent payments sent on April 17th, with a settlement date of April 22nd, and April 24th, with a settlement date of April 29th. The IRS decides which round your customers’ ACH payments will be in, and financial institutions won’t know when you can expect your payment until it is received by the financial institution. The IRS has created a tool called “Get My Payment” where you can track your EIP.
The IRS has recently made significant changes to the site which will make it easier for individuals to add direct deposit information and check on the status of their payment. Those who update their direct deposit information will receive their funds faster. However, this information must be added before the payment is scheduled, as the site can’t update it once the payment is sent out. A Spanish language version of the site is expected to be ready in a few weeks.
You can click the link below to access the site.
https://www.irs.gov/coronavirus/economic-impact-payments.
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10. Many state agencies have also extended the tax payment deadline from April 15th to July 15th. What if I have already authorized my tax payment to be made on April 15th, but I would rather my payment be made on July 15th? What can financial institutions do?
Financial institutions may begin to receive request for stop payments on these debits, so that they can be returned to the respective states. Nacha recommends that the Return Reason Code R11 be used to return these payments (Customer Advises Error) if they post prior to a stop payment being placed. ODFIs of state agencies may be contacted by their clients asking for assistance in how to handle these payments, by potentially holding these debits and later submitting them, so that they do not post on April 15th. ODFIs should be aware of the time of day these Entries are submitted to the ACH Operator, since stale-dated files submitted during a Same Day processing window will be processed as Same Day Entries.
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11. Will my EIP payment be included in my gross income?
No, the payment will not be included in your gross income. Therefore, you will not include the payment in your taxable income on your Federal tax return, nor will you pay income tax on your payment. It will not reduce your refund, or will it increase the amount of tax that you owe.
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12. What is the deadline for me to update my direct deposit information with the IRS?
You must act by noon Wednesday, May 13th by using the Get My Payment link https://www.irs.gov/coronavirus/get-my-payment in order to receive your payment via Direct Deposit. Starting later this month, the number payments being issued via check will sharply increase, so this may be the last opportunity to receive a direct deposit for your payment rather than a paper check.
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The IRS has a website that you can consult for more information. https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know