Some taxpayers without bank accounts may have a way to receive tax refunds electronically in the coming weeks, according to the U.S. Treasury Department. It announced on Thursday that it plans to provide tax refunds to people without bank accounts by issuing them as credits to their debit cards.
Debit Cards Easier and Cheaper for “Unbanked”
Currently, nine million U.S. households are without bank accounts, which equates to roughly 1 out of every 13 homes. With so many people unable to have their tax refunds directly deposited into a bank, the Treasury Department has opted for a new electronic solution.
Starting next week, the department plans to offer 600,000 “unbanked” taxpayers debit cards that can have refunds directly deposited to them. However, the cards will come at a cost, says the department. Recipients would likely have to pay around $4.95 for the card if they choose to accept it.
Even though this option comes with a fee, some say the cost is worth it since taxpayers would probably have to pay a fee at a check cashing location anyway.
Some other benefits of the card include being able to receive work paychecks on the cards through direct deposit, pay bills online and withdraw money from 15,000 ATMs nationwide without service fees.
Will Taxpayers See the Offer?
If you are currently one of the taxpayers without a bank account, you may want to pay close attention to your mail in the coming weeks. The government plans to send a letter to the random taxpayers it wants to offer the debit cards, but worries they’ll think it’s just another piece of junk mail.
The department says it won’t give up with just one letter. Instead, it will send out multiple messages in its letters to see which gets more people to sign up for the offer. If you do receive a letter and know someone else who does as well, don’t be surprised to find the government has offered different features and fee structures. They are doing so to test the program.
While the Treasury Department is saving taxpayers money, taking this route benefits the government, too. By eliminating paper checks it could save up to $40 million a year.
