Coronavirus stimulus checks: 80M still waiting for IRS payment; why the holdup?

Americans are left in limbo as the IRS's stimulus distribution and tracking systems suffer holdups and mixups -- resulting in major delays for people desperate for their economic impact payments.

SAN LEANDRO, Calif. (KGO) -- Nearly 90 million Americans have finally received their stimulus payments -- for many, a huge financial relief. However, another 80 million people have yet to receive their money.

Folks from all over the country came to the one place they could find help. 7 On Your Side received calls from coast to coast from folks who desperately need that money. We've been working to find those answers for you... and the news is both good, and not-so-good.

RELATED: Did you get a Payment Status Not Available error on the IRS stimulus check portal? Here's what that means

It was supposed to be quick cash to tide over American families as the pandemic crippled the economy, millions lost their jobs, and saw no relief in sight.
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We told you about Sharon Broussard of San Leandro. The IRS sent her payment to a closed account by mistake. "I'm definitely waiting because I was laid off from my job," she told us.

Now she's not sure if she'll ever get it.

The IRS confirmed John Bacciocco of Alameda is eligible for payment - but he has received nothing.

"It would be just nice to know that it is coming. You know what I mean? To get that, 'okay, it's on its way or it's gonna be on its way or in a week, it'll be on its way.' Anything, just some kind of answer," said Bacciocco."It would definitely have helped pay the bills, the mortgage."

Karin Melampy of Santa Clara keeps getting locked out of the IRS website. She's not sure a check is ever coming.

"It's really important; due to the coronavirus situation my husband lost his job last week," Melampy said. "We're wondering if we were a family that fell through the cracks, so I checked the IRS website... it just says no information," said Melampy.

RELATED: How to check your stimulus check status

We spoke to Aaron Klein, policy director at the Center on Regulation and Markets at the Brookings Institution.

"The government said people need emergency money to respond to a pandemic in a national emergency. It's been a month since the CARES Act, and half the people haven't even seen their money yet," said Klein.

The CARES Act allocated billions of dollars for this emergency payment. More direct deposits were scheduled to go out April 30. But millions of families are waiting for paper checks. That's the big holdup.

"We were told it could be as late as September, so you don't want to wait that long." Bay Area Congresswoman Jackie Speier (D - Hillsborough) says everyone should enter direct deposit information on the IRS website -- though she acknowledges many had trouble doing so.

"Stimulus means you're gonna get it quickly. Unfortunately, the system within the federal government is... how can I describe it? It belongs in the Ice Ages, not the 21st century," Rep. Speier said.

The IRS has upgraded the portal that allows citizens to view the status of their payments, and to enter their bank account information to avoid having to wait for a paper check.

However, many still have trouble with error messages and lock-outs.

Many taxpayers report trying different tricks to get in, such as entering information in all capital letters. Others suggest using a different browser to enter their information.

Stimulus calculator: How much money should you expect from coronavirus relief bill

Rep. Speier says it should not take tricks to get in. She said anyone who cannot get into the IRS site to find their status should contact their local member of congress.

"Don't contact me necessarily if you aren't one of my constituents, I won't be able to help you," she said. "Contact your local representative... they can often go in and find out what your particular situation is that may be locking you out."

Note: the IRS website doesn't say how much you'll get, just whether or not you're eligible for a payment.

Another gripe we're hearing? Many folks who earned a comfortable income last year, but have lost their jobs in the pandemic and have no income right now, will likely not receive any stimulus money at all - until 2021. That's because the IRS is basing eligibility only on the last tax filing a citizen has made, either from 2018 or 2019.

Janet Holtzblatt is a senior fellow at the Urban-Brookings Tax Policy Center.

"People need the money now, but the IRS doesn't know that. All it knows is you made enough money last year so you aren't going to get a payment for a very long time," Holtzblatt said.

What about Social Security and disability recipients? Many have not yet received their funds. However, officials say those folks will get paid and do not need to file an extra tax return. Their money will be deposited into the same account they use for regular Social Security benefits.

The IRS website doesn't provide updates for Social Security recipients.

Others have reported they did not receive the extra $500 for a dependent child. The IRS and Treasury Department have not said what went wrong in those cases. Parents with a dependent minor child under age 17 should receive that extra payment.
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However, the Treasury Department has said any shortfall in stimulus payments made this round will be made up when you file your taxes next year. So, you should still get it - eventually.

As for paper checks, the IRS will send out five million checks per week starting in May. The IRS will stagger mailings according to income levels, with those earning the lowest amounts getting the first checks. It will take up to five months to get checks to everyone without direct deposit.

RELATED: Stimulus, unemployment, financial help for those impacted by coronavirus

Which is why Congresswoman Speier says keep trying to enter a bank account number.

As for Sharon Broussard, her money landed in a temporary "Emerald Card" debit with H&R Block. It was created to provide her an advance on her tax refund last year, also known as "refund anticipation loans."

The debit card had expired, but the IRS had that account listed as her direct deposit account. So the IRS website would not allow her to update and correct the bank account information.

An Emerald Card service agent told Broussard her money was at the bank, and the company would load the payment onto a renewed card. It would cost her $4.95 to activate the card and $35 to cash it out. She was so desperate for her stimulus money she agreed to pay the fees.

Ten days later the card arrived, and Broussard rushed to the UPS store to pick it up.

"The whole way down there I was saying a prayer, I know that God takes care of us all, he's listening now, the money's gonna be here," said Broussard.

Broussard says she sat in her car outside the UPS office and activated the card by phone. Then the shock: the card had no money on it at all. No stimulus payment. Zero balance.

"It was completely useless, but it had a lot of papers with all the fees it would charge. I don't need it, I'm gonna cut it up," she said.

The bank charged a $4.95 activation fee to find out her balance was zero. She quickly canceled it.

"Those who need the money the most are the ones who have to pay the most money just to access their money," noted Aaron Klein of the Brookings Institution.

Klein said low-income taxpayers, in particular, are enticed into purchasing tax anticipation loans so they can get their refunds sooner. They can come with hefty fees for cashing out and activating the cards.

As for Broussard, since her account was now closed, it turns out the bank returned her stimulus payment to the IRS - which now must write her a check.

"That's the question," said Broussard. "Where is my stimulus payment?"

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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