Putting tax refunds on prepaid cards could benefit government
Share Now on:
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.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.