Funds were officially available Monday and will continue to go out through mid-January, according to the IRS. Yet people have reported a range of problems with receiving these funds, from cryptic messages on the "Get My Payment" tool to checks being sent to the incorrect bank accounts.
The IRS said some of these taxpayers will not receive a second Economic Impact Payment and instead, they need to claim the Recovery Rebate Credit on their 2020 tax returns.
Here's what you need to know about the tax credit and stimulus check problems people are facing:
What does "Payment Status Not Available" mean? And what is the Recovery Rebate Credit?
The Get My Payment tool on IRS.gov is designed to show the statuses of the first and second stimulus payments.
The IRS announced Tuesday that eligible Americans who see a status that reads "Payment Status #2- Not Available" will not get their second stimulus check via direct deposit or through the mail.
Instead, they need to claim it when they file their 2020 taxes this year. Technically, the second stimulus check is an advanced payment of this tax credit, according to the IRS.
Taxpayers will see unclaimed stimulus funds referred to as the Recovery Rebate Credit on Form 1040 or Form 1040-SR of their taxes. Individuals and married couples filing jointly can also claim the Recovery Rebate Credit if they did not receive the full amount of the first stimulus payment. Click here for more information on the Recovery Rebate Credit.
Americans should claim the credit based on their 2020 earnings, not 2019 filings like the first round of checks, according to the IRS.
The IRS originally said that those who filed 2019 tax returns and provided direct deposit information or those who successfully registered for the first payment on IRS.gov would get automatic payments. But preparing for tax season could have impacted this effort.
"The IRS is working hard to deliver the second Economic Impact Payment quickly, as required by law, while still preparing for the upcoming 2021 tax filing season. Due to the compressed timeline, the IRS is unable to reissue and mail checks and instead encourages people to file their 2020 tax return electronically to claim and receive the Recovery Rebate Credit quickly as possible," the IRS website reads.
Remember, the payment is $600 for each eligible adult and dependent for people earning up to $75,000, or $150,000 for married couples filing jointly. Those earning more than that are eligible for a reduced payment.
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What happens if unfamiliar bank information shows up in the Get My Payment tool?
Many people said that they checked the IRS site and found their payments were sent to an account they did not recognize.
The IRS issued their latest statement Tuesday night, saying that because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active or unfamiliar.
For those who used H&R Block to file their 2019 taxes, unfamiliar bank information may be associated with a refund transfer.
"Don't worry - we have sent these payments on to the method you chose for Refund Transfer: direct deposit, check or Emerald Card. The money should be there by the end of the day," the statement from H&R Block said.
Some TurboTax customers who paid tax preparation fees with their refunds also reported delays and funds sent to unfamiliar accounts. TurboTax said that the IRS is the "sole party with the ability to determine eligibility and distribute stimulus payments" and that by law, the financial institution must return the payment to the IRS if an account is no longer active.
There is no exact measure at this time of how many taxpayers were impacted. The IRS did not have a comment early Tuesday on the scope or cause of the problem.
Many who experienced problems with receiving their first stimulus checks also hired tax companies that used specific bank accounts to process their tax refunds, tax expert Eab Nassif said in April.
The bank numbers that these taxpayers see on the IRS's website belonged to tax preparation firms and were used to take out fees for tax prepper, Nassif said. That way, customers did not need to pay tax preppers out of pocket.
"People should visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what's available on IRS.gov," the IRS website reads.
For those who receive SSA, RRB, SSI or VA benefits via Direct Express, "the bank information shown in Get My Payment will be a number associated with your Direct Express card and may be a number you don't recognize," the IRS website reads.
Anyone else who thinks their payment went into the wrong bank account for other reasons should first check with their bank, according to the IRS.
If the bank says it has not received the funds and five days have passed since the deposit date, taxpayers can request a payment trace through the IRS. Click here for more information on starting a payment trace.
People should not contact their financial institutions or the IRS with payment timing questions.
What happens to people who changed bank accounts between the first and second round of payments?
According to the IRS website, the agency is only using data already in its systems by Dec. 22, 2020.
"If the second Economic Impact Payment was sent to an account that is closed or is no longer active the financial institution must , by law, return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active," the website reads.
Payment information cannot be updated now, so these people may need to claim the payment as a Recovery Rebate Credit on their taxes.
What about address changes for those who received checks in the mail?
If you have not filed your 2019 tax return, enter your new address on your return when you file. The IRS also has forms that will notify it of an address change. Click here for more information.
The Associated Press contributed to this report.