The Federal government will soon begin to disburse economic stimulus payments, many of which will be made by Direct Deposit. NACHA has discussed operational aspects of these Direct Deposits with the U.S. Department of the Treasury and its Financial Management Service (FMS).

In addition to information already being issued, NACHA sought additional information from FMS on three points:

How will the payments be identified?

The payments will appear identical as normal tax refunds made by Direct Deposit, and the bulk of the stimulus payments will have settlement dates of Fridays May 2, May 9, and May 16, 2008. Many, but not all, of the stimulus payments will be in round dollar amounts.

How will individuals be notified?

The IRS has already mailed notifications to individuals about the payments. FMS reports that an additional notification will be mailed to individuals prior to receiving the stimulus payments.

What will the government communicate to financial institutions?

FMS will be sending the attached notice to financial institutions via the Federal Reserve in the immediate future. The notice will also be posted on the Federal Reserve’s services web site at www.frbservices.org.

Additional information:

IRS Economic Stimulus Payments Resource Center
http://www.irs.gov/newsroom/article/0,,id=177937,00.html

IRS Economic Stimulus Payment Schedule
http://www.irs.gov/irs/article/0,,id=180250,00.html

IRS Economic Stimulus Payment Notice
http://www.irs.gov/pub/irs-utl/economic_stimulus_payment_notice.pdf