US Global Tax explain that, for the first time ever, some of the US stimulus payments are now being sent by debit card. The IRS will begin sending out four million stimulus payments on prepaid debit cards this week instead of mailing paper checks. With these so-called ‘Economic Impact Payments’ (EIP) cards, clients can make purchases, get cash from in-network ATMs and transfer funds to their personal bank account without incurring any fees. They may also check their card balance online, by mobile app or by phone at no cost.
The EIP cards can be used online, at ATMs or at any retail location where Visa is accepted. This free, prepaid card also provides consumer protections available to traditional bank account owners, including protections against fraud, loss and other errors. It will include instructions on how to activate and use the cards.
“Treasury and the IRS have been working with unprecedented speed to issue Economic Impact Payments to American families. Prepaid debit cards are secure, easy to use, and allow us to deliver Americans their money quickly,” said treasury Secretary Steven T. Mnuchin in a press release. “Recipients can immediately activate and use the cards safely”. EIP cards will be available to taxpayers who don’t have bank account information on file with the IRS. Currently, they are being distributed to those who had tax returns processed by either the Andover or Austin IRS Service Centers.
The IRS began distributing economic stimulus payments in April via direct deposit to taxpayers who had up-to-date information on file. It followed up with payments by paper check starting in mid-May. However, the agency estimated it might take as long as four to five months to mail out the millions of remaining checks. Now it says that sending four million prepaid debit cards will cut down on the time.
Finally, some are viewing the use of the EIP cards as a test for future stimulus payments, if any are forthcoming. If all goes well, this might be a simpler and faster approach to distributing money to taxpayers.
US Global Tax remind you that the upcoming tax deadline is on 15th July (ie that the IRS moved it from the usual 15th April), and for more information on US tax return filing, fbar fincen 114 and foreign company tax please go to http://usglobaltax.com .