The Covid Economy

January 15 is the last day for stimulus payments before tax season—unless you're part of these groups

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Friday, Jan. 15 is the last day for many taxpayers to receive a direct deposit stimulus payment before tax season, unless you are part of a few select groups.

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Congress gave the IRS until Jan. 15 to send out the economic impact payments (EIP), worth up to $600 for individuals and their child dependents, when it approved a second round of checks in late December. And while the agency says 100 million payments have been delivered, a few hiccups over the past few weeks will delay the payments for some taxpayers.

Those affected by the IRS account mix-up (mainly people who filed their 2019 returns via tax software from TaxAct, Jackson Hewitt and others) and those receiving paper checks or pre-paid debit cards may still receive their stimulus payments in the coming weeks.

The IRS is advising taxpayers to watch their bank accounts and mailboxes closely. The debit cards will be mailed in a white envelope with the U.S. Treasury Department seal. Taxpayers can determine how their EIP will be delivered by using the IRS "Get My Payment" tool.

All other eligible taxpayers who have not received a direct deposit and are not part of those groups will need to claim a Recovery Rebate Credit on their 2020 tax returns. The IRS announced Friday that it is pushing back the start of tax filing season to Feb. 12 (typically, the agency starts processing returns in late January).

The IRS is advising people to file electronically and opt for direct deposit in order to get their checks as quickly as possible.

Redirecting missing payments

The IRS is in the process of redirecting payments it erroneously sent to closed bank accounts. Jackson Hewitt, TaxAct and other companies whose customers were affected said the payments would be made available to customers starting on Feb. 1.

"Payments will be issued directly from the government later this month (our industry partners are not in possession of these funds), within weeks of the law being enacted," the agency noted. "For people in this group, payments may be issued either as a paper check or as a direct deposit."

The error also affected H&R Block and TurboTax customers, however those companies were able to work with the IRS to get the payments redirected sooner. The IRS has not responded to questions from CNBC Make It about why it was able to redirect payments for customers of some companies more quickly than for others.

Check out: $1,400 checks, enhanced unemployment: Here's what's included in Biden's stimulus plan

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