There are several reasons why the IRS might mail your payment instead of processing it as a direct deposit:
- Bank Rejection: If the bank rejects the deposit, the IRS will mail the payment. This can happen if the bank information provided was invalid or if the bank account has been closed.
- Account Restrictions: Direct deposits can only be made into accounts in your own name, your spouse's name, or a joint account. If the account does not meet these criteria, the direct deposit will be rejected.
- Institutional Refusal: Some financial institutions may refuse direct deposits to certain types of accounts, such as credit card accounts or accounts held by financial institutions outside the United States. Additionally, checking or share draft accounts payable through another institution may not accept direct deposits.
- Account Limitations: The IRS cannot deposit more than three electronic refunds into a single financial account. If this limit is exceeded, the payment will be mailed.
- Erroneous Information: If there are errors in the account or routing numbers provided, or if the account has been closed, the direct deposit will fail, and the payment will be issued as a paper check.
- Bank Mergers: Changes such as bank mergers can also result in the rejection of direct deposits, leading to the issuance of a paper check.
- Forwarding Issues: While people often change bank accounts, a direct deposit cannot be forwarded if a bank account has been closed. In contrast, a mailed check can be forwarded to a new address.
In summary, if any of these issues occur, the IRS will mail your payment as a paper check to ensure you receive it.
Sources:
Publication 4163 (12/2023)
Publication 17 (2023)
Publication 5420-C (10/2020)
Publication 927 (2020)