Good news for hundreds of thousands of Americans – the government is testing a pilot program to distribute federal income tax refunds via prepaid debit cards. Green Dot, a household name to millions of Americans who utilize prepaid debit cards on a regular basis, is the company responsible for managing the pilot program.
The limited offer will be extended to 600,000 lower income taxpayers, those most likely to be without a traditional banking relationship in the first place.
MyAccountCard Visa Prepaid Card Offers – Federal Income Tax Refund Debit Cards
Beginning next week, 600,000 low- to middle-income taxpayers will receive a letter from the U.S. Treasury Department instructing them how to use the card. In order to participate in the program, an individual must activate the MyAccountCard so a 2010 federal tax refund can be direct deposited onto the card.
According to Green Dot, the MyAccountCard is a reloadable prepaid Visa debit card that should be accepted anywhere Visa debit is allowed.
Federal Government Push for 2010 IRS Tax Refund Direct Deposit on Prepaid Debit Cards
According to the Wall Street Journal, the IRS mails out approximately 45 million paper income tax refund checks every year. By depositing federal income tax refunds directly onto debit cards instead of issuing paper checks, the IRS may save as much as 90 cents per refund.
This move toward direct deposit is not surprising. In recent years, the IRS has really pushed taxpayers toward receiving direct deposit. As it stands, taxpayers who utilize direct deposit may receive their refunds weeks earlier than paper checks.
Others Putting 2010 Income Tax Refunds on Payroll Cards
In addition to the MyAccountCard pilot program, the government is simultaneously testing a program that will allow taxpayers to direct deposit 2010 federal income tax refunds onto existing payroll cards.
It is currently unknown what card terms will be offered; the Treasury Department is testing several different types of marketing messages, offering various account features to some and not to others and offering a free card to some people while charging other individuals $4.95 per month. The point of this is to find out which offer(s) entice more taxpayers to sign up for the card.
IRS Prepaid Debit Cards Not the Only Option – Consider Walmart MoneyCards
For many years, taxpayers have been depositing IRS income tax refunds onto prepaid debit cards. One such popular card is a Walmart MoneyCard. This reloadable prepaid Visa debit card has many of the same features as the MyAccountCard mentioned in this article and is available at Walmarts across the nation. Read more about it in Suite101’s Walmart MoneyCard article.
Sources:
Bonneville Bank Selected as Prepaid Debit Card Issuer for U.S. Department of Treasury Pilot Tax Refund Program. Retrieved from businesswire.com on January 14, 2011.
Tax Refunds Move to Debit Cards. Retrieved from online.wsj.com on January 14, 2011.
Tax Refunds on Prepaid Cards Coming. Retrieved from money.cnn.com on January 15, 2011.
The MyAccountCard website, myaccountcard.gov.
Treasury Offers Tax Refunds on Prepaid Debit Cards. Retrieved from accountingtoday.com on January 13, 2011.
Other articles relating to 2010 federal income taxes:
- 2010 Tax Brackets – IRS Income Tax Rate Tables
- 2010 Tax Credits – Important IRS Federal Income Tax Breaks
- IRS Now Accepting 2010 Tax Returns: Tax Filing Season Beginning?
- When Are Taxes Due?
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
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