March 30, 2020

Emergency Economic Stimulus Legislation Contains Direct Payments to Americans

Congress passed and on March 27 President Trump signed the CARES Act containing provisions that will deliver over $2 trillion in liquidity to support the economy.

The legislation provides for “2020 Recovery Rebates” that will be paid directly to many Americans. Nacha has been in communication throughout this process with policymakers at the White House, the Treasury Department, and Congress to encourage, and assist, in the maximum use of Direct Deposit for these payments. Officials within all three of these areas of the federal government have expressed support for using Direct Deposit as the best vehicle to get these payments out safely and efficiently. Treasury officials have said publicly that payments could start going out within three weeks.

Nacha’s current understanding is that the Treasury will rely on deposit account information that taxpayers have provided to the IRS for the Direct Deposit of refunds for the 2019 tax filing season; or if the taxpayer has not filed yet, deposit account information provided for the 2018 tax filing season. The Treasury may also use deposit account information available for Social Security benefit payments. If no deposit account information is available to enable Direct Deposit, the Treasury likely will mail a check.

Based on available IRS information, Nacha estimates that as many as 80% of the rebates will be paid via Direct Deposit.

In addition to the rebate payments, taxpayers would also receive a notice by mail shortly after the payment is sent, which contains information about where the payment was sent and if it was a Direct Deposit or a paper check. The notice will have a contact number for the IRS.

There are many details about the payment process that are still to be determined and released by the Treasury. Nacha will share additional information as it becomes available.