Direct deposit will get you your stimulus check faster, but there's a catch - CNET

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Stimulus check money is on the way now that it's been signed into law.

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Barely two days after President Donald Trump signed into law the bill sending a second stimulus check of up to $600 per person, the IRS said it will start sending the first payments Tuesday night straight to bank accounts through direct deposit.

Congress is debating this week whether to send $600 checks or make the payments $2,000. But whether your household's total check winds up being less than $600 or far more, there's one thing that every recipient is expected to have in common: You'll get your second stimulus check quicker if you already have direct deposit set up with the IRS than if you don't. 

Tuesday afternoon, Treasury Secretary Steven Mnuchin tweeted that "payments may begin to arrive in some accounts by direct deposit as early as tonight," with paper checks starting to go out on Wednesday.

The good news is, the first and potentially largest group of people will be receiving their funds through direct deposit to their bank accounts as soon as Tuesday night.

The less good news is, those who don't have banking information already on file with the IRS will receive their payment via a paper check or EIP card through the mail, and depending on how quickly the IRS can process all the payments, that could mean your stimulus money may arrive weeks or months after someone else's. And as of today, the IRS doesn't have a way for you to provide your banking information if the federal government doesn't already have it.

Here's everything we know about receiving your check straight to your bank via direct deposit. For more details, here's how to calculate your second stimulus check total under the current legislation, and here's who might not qualify for another payment. This story is updated frequently with new information.

If you don't do direct deposit, you may have a big wait

Since the first check, the benefits of giving your banking information to the IRS for a direct deposit have been clear. Roughly 80 million people received their stimulus payment within the first week, out of an estimated 170 million who received a first stimulus payment. So, there's a clear advantage to having direct deposit set up with the IRS.

But while there may be a benefit if you did sign up, there is also an enormous disadvantage if you don't. The language of the bill specifies a Jan. 15 cutoff for the IRS to send stimulus checks.

So what happens after then? Anyone who doesn't get a second stimulus check sorted by that date would have to take the extra step of claiming it as a Recovery Rebate Credit as part of the 2020 tax season, presumably with exceptions for people not typically required to file taxes. 

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That means the timing for getting paid would vary wildly depending on when you're able to complete your taxes and how quickly the IRS would process your tax return. For example, people who file in February could receive their second stimulus money months before people who file in April. It isn't clear if applying for a tax extension would further delay matters.

The disadvantage to people who don't have direct deposit set up or quickly does so, is clear.

What if I don't have a bank account?

According to the Urban Institute, people with bank accounts and direct deposit (who are disproportionately white) were more likely to get their first stimulus check by the end of May than people who identify as Black, Hispanic or were below the poverty line. This was directly tied to groups who were more likely to have banking accounts and who filed that information with the IRS to facilitate direct deposit tax returns.

Bank of America, JPMorgan Chase, Wells Fargo and several other large banks now offer more affordable checkless bank accounts as part of a program to make it easier for people to get bank accounts. 

Read more: Sorry, not everyone will get a second stimulus payment

You may need to set up direct deposit with the IRS if you don't have it already in place.

Sarah Tew/CNET

How the IRS gets your banking information for stimulus checks

For the first round of payments, the IRS used direct deposit information from one of a few places:

• Your most recently filed tax return if you received a refund by direct deposit in 2018 or 2019.
• The bank information you provided through the Get My Payment online tool.
• The bank information you provided through the Non-Filers: Enter Payment Info Here tool.

The IRS said it is updating its Get My Payment portal so you can check the status of your first and second payments, but the service said nothing about using the tool with the second check to provide banking information. We've asked the IRS for clarification. The IRS said the tool should be available within a few days with updated information.

What bank account info does the IRS need to set up direct deposit?

While the IRS has not said whether it will allow you to provide banking information for the second check through the Get My Payment tool, if it does, you'll want to have on hand your bank account type and routing and account numbers. You have several ways to find this banking information. We've asked the IRS for clarification.

Banking website: Your bank's website may show your routing and account numbers. Log in to the account you want to use, and look around for the numbers you need.

Banking app: If your bank has an app, it may show you your account and routing numbers. In the app, tap the account you want to use to see the account and routing numbers.

Printed check: At the bottom of your check you most likely will see three sets of numbers: The first set of nine numbers is your routing number. The second set of 8 to 12 numbers is your account number. The third set is the one you don't need for direct deposit, as it's the number of the individual check.

Check this IRS page for more help with locating your routing and account numbers.

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Can I change or correct my banking details with the IRS?

With the first checks, you could use the Get My Payment and Non-Filers tools to provide the IRS with your banking information. The IRS has said, however, it does not allow people to change the direct deposit information for a stimulus payment it has on file. This is a safeguard against fraud. 

The IRS said if your banking information has changed or is incorrect or the bank account is closed, the bank will reject the deposit and the federal bureau will then mail the payment to the address it has on file. For help, you could attempt to call the IRS assistance phone number at 800-829-1040. For specific questions on stimulus payments, call here's the number for the IRS help line: 800-919-9835.

If you've moved, you can provide the IRS with your new mailing address.

Is there a deadline to provide my banking information to the IRS?

For the first check, the IRS set a May 13 deadline to provide the agency with your banking information -- this was about a month after the first direct deposits were made. If you missed the deadline, you got your payment in the mail either as a paper check or as a prepaid debit card. The IRS has not said whether you will be able to provide banking information for the second check, or if there is a deadline.

For more on the checks, here's how quickly the IRS could send your payment, how to calculate how much money you might get in a second stimulus check and everything you should know about stimulus qualifications now.

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