IRS Will Provide Funding for Tens of Millions by Direct Deposit Effective Wednesday, March 17

Updated March 15, 2021:

The IRS announced that the settlement date for the initial wave of tens of millions of economic impact payments by Direct Deposit will be Wednesday, March 17. This is the date on which the IRS will provide the funds to the banks and credit unions to further make available to recipients. The Nacha Rules require the banks and credit unions to make the funds available to the account holders by 9:00 a.m. local time on the settlement date; again, in this case, March 17.

The ACH Network is capable of clearing and settling payments, and making funds available, as soon as the same day on which Direct Deposits are sent. The Nacha Rules allow for ACH credits, such as Direct Deposits, to use an “effective date” of either one or two banking days in the future, or, since 2016, a “same day” effective date. It is up to the sender—in this case the IRS—to decide when it wants the money to be made available. The IRS chose the date of March 17, which is the date on which the IRS intends for settlement to occur.  

Regardless of when payment files were sent and received, settlement of the funds for the payments will occur at 8:30 a.m. ET on Wednesday, March 17, exactly as instructed by the IRS. This is literally the moment in time when the money will be transferred from the government to banks’ and credit unions’ settlement accounts at the Federal Reserve. There is no mystery where the money is from the time the first payment file was transmitted on Friday, March 12 to when all recipients will have access to the money on Wednesday—it is still with the government.

Updated March 12, 2021:

Today, the IRS announced that the settlement date for the initial wave of tens of millions of economic impact payments by Direct Deposit will be Wednesday, March 17. This is the date on which the IRS will provide the funds to the banks and credit unions to further make available to recipients. The Nacha Rules require the banks and credit unions to make the funds available to the account holders by 9:00 a.m. local time on the settlement date.

“The ACH Network demonstrated its capacity to handle tens of millions payments above and beyond the normal daily volume of more than 100 million payments,” said Jane Larimer, President and CEO of Nacha, the organization that governs the ACH Network.

Statement from Nacha, the Administrator of the ACH Network, on the Passage of the American Rescue Plan Act

HERNDON, Va., March 11, 2021 – President Biden has signed into law the American Rescue Plan Act, which provides for direct payments to many Americans. These payments will largely be delivered electronically by Direct Deposit over the ACH Network. Following is a statement from Jane Larimer, President and CEO of Nacha, the organization that governs the ACH Network.

“Passage of the American Rescue Plan Act of 2021 into law provides relief for tens of millions of Americans. The ACH Network is ready to deliver these relief payments via Direct Deposit, with funds available to people on the day instructed by the IRS.

“Like the first two rounds of economic impact payments, the number of Direct Deposit payments could approach or exceed 100 million. The ACH Network is ready to deliver these payments, and other assistance such as unemployment benefits and child tax credits, by Direct Deposit.”