WASHINGTON (CBS4) — Low-income taxpayers who don’t have bank accounts will be able to get their tax refunds on prepaid debit cards supplied by the government, the Treasury Department announced.
The department plans to send letters to 600,000 households next week, offering to put their tax refunds on the debit cards, which can be used to get money from ATM machines or to buy goods and services from retailers.
The Internal Revenue Service encourages taxpayers to have their tax refunds deposited directly into bank accounts. For those without bank accounts, the debit cards will allow them to avoid check-cashing fees.
Taxpayers can get refunds faster with the debit cards than with checks, said Deputy Treasury Secretary Neal Wolin.
“This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures,” Wolin said.
Cardholders won’t have to pay service fees if they use the cards to withdraw money from ATMs in the MoneyPass network. They will have to pay regular service fees if they use ATMs outside the network.
The program will also be open to workers who get paid by their employers using payroll cards, which are similar to prepaid debit cards.
The Treasury Department said more than 1.7 million U.S. workers receive their wages on payroll cards.
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