24-hour match: 2x your gift’s impact today! Double my donation

Putting tax refunds on prepaid cards could benefit government

David Gura Jan 15, 2011
HTML EMBED:
COPY

Putting tax refunds on prepaid cards could benefit government

David Gura Jan 15, 2011
HTML EMBED:
COPY

TEXT OF STORY

JEREMY HOBSON: Well, from corporate taxes to personal income taxes. There’s a change coming this year from the IRS. For those earning less than thirty-six thousand dollars, it’ll now be possible to get tax refunds on a prepaid debit card.

Marketplace’s David Gura has that story.


David Gura: The pilot program was designed for taxpayers who don’t have checking accounts. It’ll also help the government. Ron Shevlin is a banking technology analyst with the Aite Group.

Ron Shevlin: This is clearly about their own benefit.

It costs $1 to mail a check, but just 10 cents to send out a prepaid card.

Richard Gregg: When we can convert everybody on the tax-refund side from checks to electronic, we can save about $40 million a year.

That’s Fiscal Assistant Secretary Richard Gregg. The Treasury Department hopes low-income taxpayers will keep using the cards — for bills and purchases.

Gregg: It’s also an effort to try to provide a banking service to individuals who may not have a bank account.

If that works, that’ll be good news for the Treasury Department’s partners: The Green Dot Corporation and Bonneville Bank. They’ll get to pocket fees for withdrawing money from out-of-network ATMs. Richard Gregg says the government’s been upfront about that.

Gregg: We made sure that there won’t be any surprises for the individual receiving the card.

In Washington, I’m David Gura for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.

Don’t miss this match!

Donate today and your gift will be matched dollar-for-dollar by the American Public Media Board.