Second Stimulus check: will it be a paper check or a debit card?

The first round of stimulus checks - direct payments to eligible Americans to help with the economic effects of the coronavirus pandemic - has now seen the IRS make over 150 million payments to individual citizens. These payments have been made via direct bank deposit, paper checks (delayed to ensure Trump's signature was on them) and in a small number of cases an Economic Impact Payment Card (EIP), a debit card loaded with the stimulus check money and which can be used just like any other debit card.

But if a second stimulus check does come, will you be more likely to receive direct deposit, a paper check or one of the debit cards?

In general, where the IRS have your bank details, you will get a direct bank deposit. If you got a direct bank deposit from the first stimulus check payments, expect any future payments to go straight into your bank.

If the IRS does not have your bank details, you can expect to get either a paper check or a prepaid direct debit card. The IRS now appears to be moving in favour of the debit cards, arguing they are an easier, safer and faster way to get money to hard-working Americans who need the cash to cope with the Covid-19 crisis.

From the first round of stimulus checks, when there were around 20 million payments still to be made the IRS said it would send out four million of them using the debit cards (20% of that remaining amount). It appears likely that in a second round of stimulus checks a higher proportion of payments will be made by Economic Impact Payment Card.

Will you be able to choose to receive a debit card?

The IRS has made it clear that, at the moment, people cannot choose which format they receive their payments in. For those who do not receive their payment by direct deposit it will either come in the form of a paper check and "in a few cases, by debit card". The Bureau of the Fiscal Service (BFS), another part of the Treasury Department that works with IRS, makes the decision as to who gets which form of payment.

There may of course be a chance that the IRS decides to provide the debit card as an option for a second round of stimulus checks.

Problems with debit cards

The Economic Impact Payment Cards have caused some problems, with people mistaking the card for a scam or junk mail and throwing it away. (It then costs $7 to have a replacement issued, plus a further $17 in postage and handling fees).

In part the problems have arisen because the EIP Cards are in envelopes marked Money Network Cardholder Services, a name unfamiliar to most people, and the envelope does not say IRS or Treasury on it.

Second stimulus check

The big question of course remains whether there will actually be a second round of stimulus checks. There is provision for another set of payments in the HEROES Act, which the Democrats have passed in the House of Representatives, however as things stand there is no chance of it passing the Republican-dominated Senate.

For those keen on a second stimulus check there is hope with President Donald Trump now appearing to be keen to bring in another set of coronavirus relief legislation, saying "I think we're going to be helping people out" and "getting some money for them", the president.

It's clear however that legislation won't be the HEROES Act, which he said was "DOA. Dead on Arrival".

Either way, it doesn't look like there will be any rapid moves, particularly with the country being rocked by the protests over the death of George Floyd, and Trump in usual combative mood and in no way looking to build bridges with the Democrats.