As banks across Wisconsin work to disburse recently received ACH files and negotiate the latest round of Economic Impact Payment (EIP) checks, banks need know there are differences between this round of EIPs and the previous disbursement. Under the newest round, if Treasury issues a check for the payment, “40436” will appear first in the MICR-line of the check. Treasury began printing checks last week and the first run of checks will have a payment date of January 6, 2021. If the payment is sent via ACH file, the ACH data will include “XX” in the ACH identifier (XXTAXEIP2) and the check symbol. The new data is meant to help identify the second round from a first round EIP. The distinction is important as this second round of EIPs is not subject to garnishments.
If the bank receives an EIP via ACH for an account that is closed, Treasury and IRS have instructed that the bank is to return the ACH as account closed. This is standard procedure. See Chapter 4 of Treasury’s Green Book regarding the processing of electronic payments.
The new law provides that individuals alive on January 1, 2020, are entitled to an EIP this round. IRS is the agency responsible for verifying eligibility for payment before disbursement of an EIP. If the bank is asked to negotiate a Treasury-issued EIP check made payable to a deceased person, bank’s normal procedures regarding how it negotiates a check made payable to a decedent should be implemented. As is true for any check made payable to a deceased person, the bank should be careful to ensure it has a proper endorsement regarding the deceased party. More information regarding the newest round of EIPs may be viewed here. Treasury’s Fiscal Bureau has created FAQs regarding bank operations which may be viewed here.
By, Ally Bates