Delivery of Economic Impact Payments (EIPs) (IN11393, Version 6, Updated July 7, 2020)
Summary
The July 7, 2020 version of CRS Insight IN11393 adds that several glitches have marred delivery: prepaid debit cards were sent to people who did not expect them and discarded the envelope as junk mail, and an estimated 365,000 persons have not received payments for dependent children even though they provided the required information. It says many individuals have had difficulty getting their questions about missing or incorrect payments answered by the IRS. It updates the delivery count to nearly 159 million payments totaling about $267 billion by June 5, including 3.7 million prepaid debit cards. Non-filers have until October 15 to register, and the estimate of 12 million such people remains.
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INSIGHTi
Delivery of Economic Impact Payments (EIPs)
Updated July 7, 2020
To mitigate the financial hardship many Americans are experiencing during the Coronavirus Disease
(COVID-19) pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES)
Act (P.L. 116-136). A critical element of the aid package is direct payments to certain individuals in 2020.
The payments are referred to as “recovery rebates” in Section 2201 of the act, but the Internal Revenue
Service (IRS) calls them “economic impact payments” (EIPs) in the notices it shares with the general
public.
For more information on these payments, see CRS Insight IN11282, COVID-19 and Direct Payments to
Individuals: Summary of the 2020 Recovery Rebates/Economic Impact Payments in the CARES Act (P.L.
116-136).
This Insight presents a brief overview of the delivery of EIPs and identifies factors that might affect the
timing and accuracy of their delivery.
Delivery of Payments
The IRS is administering the EIP program, with assistance from the Treasury Department’s Bureau of the
Fiscal Service, which is issuing the payments. In doing so, it has drawn on its experience in administering
a similar payment program established by the Economic Stimulus Act of 2008 (ESA, P.L. 110-185).
According to figures from the IRS, most payments had been delivered by June 3, 2020.
The CARES Act provided the IRS with $500.7 million to implement the program; the funds are available
until September 30, 2021. By contrast, Congress appropriated $270 million for the IRS to implement the
2008 stimulus payments.
EIPs have been distributed to three groups of taxpayers:
eligible individuals who filed a return in 2019 (or in 2018 if no return for 2019 is filed
before payments are disbursed);
eligible individuals who were not required to file a return for either year and who
received Social Security benefits, Railroad Retirement (RR) benefits, Supplemental
Security Income, or certain Veterans Administration benefits in 2019; and
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all other eligible individuals who filed no return for either year and received none of the
benefits listed in the previous category; these individuals are often referred to as
nonfilers.
Taxpayers in the first group automatically received a payment. Those who provided bank account
information to the IRS in 2019 or 2018 to receive a refund got their payment via direct deposit. Some
individuals who filed their 2018 or 2019 returns with the help of a tax return preparation firm may have
experienced a delay in getting their payment.
But taxpayers in the first group who did not provide bank account information for those years received a
check in the mail, unless they used an online application from the IRS called Get My Payment to provide
direct deposit information. Taxpayers had until May 13, 2020, to do so.
Taxpayers in the second group (i.e., recipients of Social Security benefits, Railroad Retirement benefits,
Supplemental Security Income [SSI], or certain Veterans Administration [VA] benefits in 2019) also
received a payment automatically. They did not have to file a return for 2018 or 2019 or provide other
information to the IRS. But in order to receive a $500 payment for a qualifying child, recipients of Social
Security benefits, SSI, and certain VA benefits had to provide certain details through an online tool for
nonfilers (Nonfilers: Enter Payment Info Here page at IRS.gov) by May 5, 2020.
Taxpayers in the third group must register with the IRS to get a payment, since the IRS would otherwise
have no current contact information. This group encompasses an estimated 12 million people who were
not required to file in 2018 and 2019 because their income was below the filing threshold for their filing
status. To expedite the registration process, nonfilers in this category are encouraged to use the same
online tool for nonfilers. The deadline for registering is October 15, 2020.
It took the IRS about 10 weeks to start distributing the 2008 ESA stimulus payments after enactment of
the ESA. By the end of 2008, the IRS had delivered nearly 143 million payments worth a total of $107.3
billion. By contrast, the IRS began delivering the first round of EIPs 15 days after enactment of the
CARES Act. By June 5, the IRS had delivered nearly 159 million payments totaling about $267 billion;
120 million payments (or 75%) were delivered via direct deposit, 35 million (or 22%) as paper checks,
and 3.7 million as prepaid debit cards. (As a point of reference, the Ways and Means Committee
estimated at the outset of the EIP program that between 150 million and 170 million taxpayers would
receive payments, and that the IRS would need to obtain information from 90 million to 110 million of
them to deliver payments via direct deposit or a paper check.)
Several glitches have marred the delivery of EIPs. Prepaid debit cards have been sent to persons not
expecting them who discarded the envelope containing them as junk mail. An estimated 365,000 persons
have not received payments for dependent children, even though they had provided the IRS with the
required information. And many individuals have had difficulty getting their questions about missing or
incorrect payments answered by the IRS.
Factors That May Affect the Delivery of EIPs
There are several factors that may have affected the timing and accuracy of the IRS’s distribution of EIPs.
One factor is the size of IRS’s workforce. It is 20% smaller today than it was when the IRS administered
the 2008 stimulus payments. With this reduced workforce, the IRS is processing 2019 tax returns (which
are due by July 15) while implementing the EIP program. Even allowing for an increase in overall
productivity between 2008 and today, the agency may find it difficult to deliver EIPs to eligible taxpayers
for whom it has no bank account information or a current mailing address.
Another factor is the current status of the IRS workforce. In mid-March, to protect employees and
taxpayers from contracting COVID-19, the agency closed its Taxpayer Assistance Centers and reduced
taxpayer phone service. Then on March 30, IRS managers ordered employees who could work remotely
Congressional Research Service 3
to do so immediately. It is unclear how teleworking has affected the EIP program. Although some
employees returned to their offices in late April, there has been concern that remaining critical work for
the program cannot be done in a timely manner by employees still working from home. To increase phone
assistance for taxpayers with questions about their EIP, the IRS announced on May 18 that 3,500 phone
operators had been recalled.
There is a concern that a shortage of IRS employees with a good working knowledge of COBOL—the
programming language for IRS’s core information systems since the early 1960s—might affect the
delivery of EIPs to certain taxpayers.
Yet another factor is the IRS’s seeming reliance on the internet to provide needed information and a
mechanism for low-income nonfilers to receive a payment. Most EIPs have been delivered, and the IRS is
now focused on delivering them to nonfilers for whom the IRS has no current information. Conducting
outreach through the internet may not lead to the desired results, because many of these individuals may
be having trouble accessing the internet, owing to the pandemic. Places where they normally may get
access, such as public libraries, community centers, and volunteer taxpayer assistance centers, remain
closed in many communities. According to an estimate by the Pew Research Center, 46% of American
adults with household income below $30,000 do not own a computer. Nonfilers for 2018 and 2019 who
do not register with the IRS by October 15, 2020, may be able to claim an equivalent payment if they file
a tax return for 2020.
Author Information
Gary Guenther
Analyst in Public Finance
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
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