Man holds information about Coronavirus stimulus checks.
The CARES Act provided a $1,200 Economic Impact Payment, commonly referred to as a stimulus payment or stimulus check. To date, the IRS has already issued over 140 million of these payments. The majority of these payments were made via direct deposit. But there are still millions of payments to be made.
Today, the U.S. Treasury announced they will be sending 4 million Economic Impact Payments (EIP) via prepaid debit cards, while the remaining payments will be made by check.
The EIP Cards, as the Treasury referred to them, will be mailed with instructions for activation and can be used to make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees.
The EIP Card, issued by MetaBank, can also be used online, at ATMs, or at any retail location where Visa V is accepted. It has the same consumer protections as traditional debit cards, including protections against fraud, loss, and other errors.
According to the Treasury, “the EIP Card is part of Treasury’s U.S. Debit Card program, which provides prepaid debit card services to federal agencies for the electronic delivery of non-benefit payments.”
These cards are being made available to recipients who do not have bank account information on file with the IRS. The IRS is issuing these to taxpayers whose tax return was processed by either the Andover or Austin IRS Service Center.
You can find additional information at the EIP Card website and FAQ page.
Prepaid Debit Cards Will Get Payments into Recipients’ Hands More Quickly
There is a clear need to get payments into the hands of eligible recipients as soon as possible, and those without a bank account on file are often those who need the stimulus payments the most.
The IRS’ originally estimated it could take up to 4 or 5 months to process the millions of checks for individuals who did not have an address on file. Sending out 4 million prepaid debit cards will reduce that time.
Is This a Test for the Next Stimulus Payment?
Previous stimulus check payments have been made via direct deposit or by mailing physical checks. However, this is not the first time using prepaid debit cards for stimulus payments has been suggested. This is a popular trend among some of the current stimulus check proposals, including in several stimulus proposals that would send eligible taxpayers $2,000 per month for up to a year.
It’s possible the IRS is doing a test run to see how quickly they can mass-produce and issue prepaid debit cards as a way to improve their efficiency in issuing stimulus check payments.
If this program is successful, it’s possible the next stimulus check will be issued via a prepaid debit card as well. This would allow the IRS to more efficiently get stimulus checks into the hands of those who need them the most.