Local News

Some COVID-19 stimulus payments misrouted, delayed

Posted April 17, 2020 1:45 p.m. EDT
Updated April 17, 2020 2:56 p.m. EDT

Coronavirus: Money

— An unknown number of federal stimulus payments have been misrouted, delaying COVID-19 payments for people, apparently due to electronic paperwork errors.

A spokeswoman for the State Employees Credit Union said the problem with some direct deposits cropped up there and that "our understanding is that similar situations are happening at all financial institutions."

Other media outlets are reporting the issue in other parts of the country.

SECU spokeswoman Leigh Brady said the Internal Revenue Service sent direct deposits down with incorrect information for some taxpayers "resulting in those payments being rejected" and returned to the IRS.

She said the credit union expects people to get paper checks instead.

It's not clear how long that will take, but it could be weeks, possibly months. The federal government has said paper checks will start going out next week and go first to people with lower incomes. The Washington Post reported that checks are scheduled to go out at a rate of 5 million a week until September.

These payments total $1,200 per person making less than $75,000 a year, plus another $500 per child under 17.

Joye Callaghan of Holly Springs told WRAL News that her family's payment was rejected this week. She said her husband had to shut down his business due to the pandemic, though she's still working for the Johnston County school system.

"We can pay the house, and we can eat," she said Friday.

More curious for Callaghan: The IRS deposited the family's tax refund into the account without issue. She said SECU told her that, for the stimulus payment, both the account and routing numbers were correct, but the checking account was misidentified as a savings account.

Brady said SECU couldn't say how many people experienced a similar problem, but that any rejected payments "were returned to the IRS pursuant to the rules and regulations governing electronic payments."

The delayed stimulus payment is part of a triple whammy for the Callaghan family. Callaghan said her husband applied for Paycheck Protection Program funding to keep his business open, but it ran out too quickly.

Congress may authorize another $250 billion for this program, which started just under $350 billion nationwide.

Callaghan said her husband also applied for unemployment but has not been able to get through to the state's call center.

People who are self-employed typically aren't eligible for unemployment, but the federal government is making money available. The state Division of Employment Security won't have that particular program open for applications until April 25, though.

It's not clear how widespread the problem is with rejected stimulus payments. North Carolina Bankers Association President and Chief Executive Peter Gwaltney said that WRAL's call Friday morning was his first on the issue.

"They're sending out so many checks from Treasury," Gwaltney said. "I would be speculating what the problem is."

WRAL has reached out to the IRS for comment.

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