Stimulus Checks: 7 Reasons Yours May Be Delayed

Amid the coronavirus pandemic and a stimulus relief package making its way to Americans, more than [...]

By Michael Hein

Amid the coronavirus pandemic and a stimulus relief package making its way to Americans, more than half deemed eligible have since received their stimulus payments in mid-April, but tens of millions in the U.S. are still waiting for their cash. While the IRS is in the middle of issuing an economic relief payment — or "stimulus check" — to nearly every American to offset the burden of the coronavius pandemic, the process is not going smoothly for many people. The checks are going out slowly, and in many cases, updates on specific payments are few and far between. There are a number of reasons why the IRS may be taking a while to get your payment to you.

The U.S. Congress approved the economic impact payments as a part of the CARES Act — the third stimulus bill passed in response to the coronavirus pandemic. They then tasked the IRS with distributing the payments, using the same methods that they used to distribute 2018 and 2019 tax refunds, which officials hoped would make the process as fast as possible. So far, that has not been the case for everyone, as many Americans have switched banks, changed their mailing address or had some other hindrance to receiving their check.

The IRS has been scrambling to handle this massive undertaking at an urgent pace. A report by ProPublica notes that the IRS is under-staffed and ill-equipped for this emergency, with plenty of room for error in the process. The agency has added a new app called Get My Payment to its website in the hope of automating some communication with the public, but even it admits that the site is only updated once per day.

In the meantime, Americans are in desperate need of their economic impact payment, with unemployment rates sky high and other public programs like food banks stretched to their very limit. Getting specifics on your economic impact payment can be difficult, but there are some general things about the process to be aware of, as they may help you guess what is going on between updates. Here is what we know about why stimulus checks are being delayed in many cases.

Long Processing Times

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(Photo: Jeff Fusco, Getty)

First off, the IRS is taking a long time to process new information from the Get My Payment app and allocate economic impact payments accordingly. As noted above, experts say the IRS has been "gutted" by Congress in recent years, and is not equipped for the sheer volume of work it now faces. In many cases, while it is frustrating, it may simply take the IRS a while to process the information you added through the Get My Payment app, and then show that update on your payment status. For those that added direct deposit information and are still being told that a paper check is on the way, sadly, patience is the only answer.

Waiting for a Check

For those that are waiting for a paper check on purpose, these will take time. The IRS says that the first round of paper checks will be mailed out on Friday, and Americans with the lowest reported income are getting priority. Checks will continue to go out after that, totaling about 80 million sent by mail.

According to a report by The Washington Post, paper checks were delayed by several days when the Treasury Department decided at the last minute to print President Donald Trump's name in the memo section. The president is not legally authorized to sign checks from the treasury, and this step has never been taken before on previous stimulus packages. U.S. Secretary of the Treasury Steven Mnuchin claims that this was his idea.

Old Bank Account

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(Photo: Ali Balikci/Anadolu Agency/Getty Images)

For those who received their most recent tax return by direct deposit, the IRS automatically sent this economic impact payment to that account. If that account is closed, the payment would have bounced back to the IRS, whose next step would be to send a paper check to the most recent mailing address on file for you. If this is not what you want, you can enter new banking information on the Get My Payment app, but again, it is taking time to process all the input on that fairly new site.

Old Mailing Address

Another, potentially more serious issue in the coming weeks could be that your 2018 or 2019 taxes have an inaccurate mailing address on them, and the IRS may have sent your check there. If this is the case, be sure to communicate with the post office about forwarding any mail you may receive there to your new address. If possible, contact the new tenants of your old home as well, just to be safe.

Did Not File Taxes in 2018 or 2019

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(Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images, Getty)

Many Americans are in danger of not receiving an economic impact payment simply because they did not file a tax return in 2018 or 2019. According to ProPublica, an estimated 6 million Americans are not required to file a tax return because they do not make enough money. Of course, these people need the stimulus check as well.

If you are in this boat, you must fill out a new form on the IRS' website for "Non-Filers." You can input your information there, proving you are a U.S. citizen or resident and qualify for the payment. Note that this is a separate page from the Get My Payment app, and is specific to those who have not filed a tax return in the last two years.

Third Party Banks

Finally, some checks are getting held up after they leave the IRS, according to a report by WHNT19 News in Alabama. The outlet spoke to financial experts at Goode Tax Service in Decatur, who found that some of their clients are having trouble getting their stimulus check because of a third party bank used when filing their taxes.

Tax services sometimes direct their clients' tax refunds to a third party bank for processing, where the fee for their service is deducted. The refund is then forwarded to the client, who agreed to pay the accountant ahead of time. However, in the case of these stimulus checks, no fees are supposed to be deducted, and these third party banks are simply holding up an already frought process. Emmitt Goode Jr. noted that this is causing a glitch where the third party banks send the stimulus check back to the IRS in some cases.

"Our bank sent those checks back to the IRS, and that's the problem," he said. "The IRS thinks these temporary accounts created by the bank are these people's actual account numbers, and that's not true."

If you used a tax service, tax software or other financial adviser to help with your 2018 or 2019 taxes, and you have not received your economic impact payment, consider reaching out to them for advice on how to go about getting your money.

Plans for Future Payments

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(Photo: Michael Brochstein / Echoes Wire / Barcroft Media via Getty Images)

Finally, it is worth noting that all of this frustration may pay off in the coming months. According to a report by Forbes, lawmakers are already in the process of drafting ideas for future economic impact payments as the coronavirus pandemic rages on, and by the time they come out, the distribution process may be streamlined.

Rep. Tim Ryan of Ohio and Rep. Ro Khanna of California have introduced The Emergency Money for the People Act to Congress. In its current form, this bill would guarantee Americans up to $2,000 per month for at least six months to offset the mass unemployment caused by the coronavius pandemic. Ryan and Khanna have added specific language to the bill to try and fill some of the gaps left by the CARES Act, ensuring that it would cover college students, adults with disabilities and others left out by this current round of payments. So far, the bill is in its very earliest stages.

To check the status of your Economic Impact Payment, visit the IRS' website. For the latest information on the coronavirus pandemic, visit the CDC's website.

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