Stimulus Check Update: Direct Payments Delivered in 4 Waves. Which Wave Will Carry Your Check?

The first round of COVID-19 relief checks was released 11 months ago. Since that time, the IRS has become a well-oiled direct stimulus distributor. It took them less than three weeks to distribute the first two rounds of direct payments, and they say they're ready to do it again.

After two rounds of direct payments, we have a good sense of what we can expect with the third shot in the arm. President Joe Biden says that checks should begin arriving in bank accounts this month, and based on history, it's safe to believe that his prediction is accurate.

We also know from history that payments are sent in four waves. The wave in which you can expect your check is likely to be a repeat of your previous payments.

Wave No. 1: Direct deposit recipients

With the first two rounds of stimulus payments, the earliest recipients were taxpayers who opted for direct deposit when they filed their 2019 tax return. That's because the IRS could easily move funds into those accounts using information they already had available to them. The only fly in the ointment was the number of direct payments accidentally sent to tax preparation companies instead of individual taxpayers. Companies like H&R Block and Jackson Hewitt quickly corrected the glitch, making it less likely that it will happen again with this round.

If you opted for direct deposit on the last tax return you filed, you should be in the first wave of stimulus check delivery. The only exception is if you've changed banks since filing your last tax return and have not informed the IRS of your new banking information. If that's the case, we'll spell out what you need to do to claim your payment in just a moment.

If, as expected, the stimulus bill makes its way to Biden's desk by Wednesday and is signed into law, we expect millions of direct deposit payments to make their way into bank accounts by the third week of March.

Wave No. 2: Paper check recipients

With history as our guide, we expect the second wave of direct payments to be mailed one week after direct deposits begin. If you received your last stimulus payment via mail, you will likely receive your next check the same way (unless you have filed your 2020 tax return and requested direct deposit). If that's the case, millions should begin receiving their live checks the last week of March.

Wave No. 3: EIP card recipients

If the delivery pattern follows the first two rounds of stimulus payments, prepaid EIP cards will begin arriving one week after live checks -- likely, the first week of April. A word of warning: The last round of EIP cards were sent in plain envelopes that looked enough like junk mail to inspire some to toss them out. Comb through your mail carefully -- at least until you have your EIP card in hand.

Wave No. 4: Recovery Rebate recipients

If you're eligible for a direct stimulus payment (in any form) but fail to receive a check, it could be for one of these reasons:

• You've moved since filing your last tax return and the IRS does not have your current address.
• The last time you filed a tax return, you requested a direct deposit. However, you've changed banks since that time, and the IRS does not have your current account information.
• You are not required to file a tax return.

If you don't receive a direct stimulus payment despite eligibility, all is not lost. Claim the funds on line 30 of your 2020 tax return -- the Recovery Rebate Credit (even if you're not typically required to file a tax return). If you've already filed your 2020 tax return, file an amended return by filling out IRS Form 1040-X.

If your rebate funds are recovered through the Recovery Rebate Credit, you will be in the fourth wave of recipients. The delivery date will depend on when you file the claim.

Who's eligible?

Direct stimulus payment eligibility for the American Rescue Plan is as follows:

Whether you're awaiting your stimulus check to cover necessary expenses, to build a much-needed emergency fund, or to invest in your future, it's good to have an idea of when you can expect payment. In the meantime, if COVID-19 has hit you hard in the pocketbook, visit our coronavirus hardship loan page to learn if you're eligible for a loan to tide you over.