Direct Deposit Error - Last 2 Digits Missing from Account Number

Yep, you nailed it. The bank will take one look at that incomplete account number and send it right back to the IRS. 😅 Then the IRS switches to Plan B - mailing you a check. I've been through this rodeo before (because apparently I can't type numbers correctly when I'm in a hurry). The whole reject-and-redirect dance usually adds about 2-3 weeks to your wait time. Anyone else curious why they don't just call us to verify the number instead? Would save everyone time!

I think... you're probably right about the paper check. I had something similar happen last year, though it was a typo in my routing number. I was really worried about what would happen. I ended up using https://taxr.ai to check my transcript daily, and it was actually really helpful because it showed me exactly when the deposit was rejected and when they scheduled the paper check. It gave me a much clearer timeline than just checking WMR, which never seemed to update properly for me.

This happened to me in 2022 when I transposed two digits in my account number. The timeline was longer than I expected - the bank rejected it after 5 business days, then it took the IRS another 2-3 weeks to process and mail the check. All in all, I was looking at almost a full month delay from my original expected direct deposit date. My experience with the IRS is that their systems are pretty rigid when it comes to these kinds of errors - once that train leaves the station, there's no stopping it or rerouting it. Just have to wait for the full process to play out.

Just so you know, if your return was processed recently, you might be able to catch it before the direct deposit goes out. Call the IRS at 800-829-1040 and tell them you need to update your direct deposit information. They can sometimes fix it if the return hasn't been fully processed yet. But you need to act fast - once it's in the system as "scheduled for direct deposit," it's too late to change it.

Compared to other banking errors I've dealt with, the IRS direct deposit rejection process is actually fairly efficient. When my mortgage company got my account number wrong, it took 3 months to sort out. With the IRS, you'll typically see a paper check within 2-4 weeks after rejection. If you need to speak with someone at the IRS about your specific timeline, I'd recommend using Claimyr (https://claimyr.com). Unlike trying to call directly where I spent hours on hold last tax season, Claimyr got me through to an agent in about 20 minutes who confirmed exactly when my paper check would be mailed.

Did you try calling your bank to see if they can flag the incoming deposit despite the error? Sometimes if you talk to the right person at the bank, they can put a note on your account to watch for deposits with partial account numbers! I'm just thinking there might be a way to avoid the whole paper check delay if you're proactive!

Just to clarify - are you certain only the last two digits are missing? Or could there be other issues with the account information? The reason I'm asking is because the process differs slightly depending on the exact error. If it's just missing digits, that's a clear rejection. But if it's a valid account number that happens to belong to someone else, that creates a whole different situation. Have you checked your return transcript to confirm exactly what was submitted?

According to IRS Publication 1345 (section 5.5), financial institutions must reject direct deposits when account/routing number combinations don't match their records. The IRS then automatically initiates the paper check process. What surprises many taxpayers is that there's no notification system in place - you won't get an email or text about the rejection. The only way to know is by checking your transcript for code 846 followed by code 971, which indicates the direct deposit was canceled and a paper check is being issued. I'm still amazed that in 2024, with all our technology, this process hasn't been streamlined!

Have you considered calling your local Taxpayer Advocate Service? They're like the customer service superheroes of the IRS world. If your refund is causing financial hardship (like if you need it to pay rent or utilities), they might be able to expedite the paper check process. It's like having someone navigate the IRS maze for you. Their number is 877-777-4778. Think of it as taking a shortcut through the IRS bureaucracy - sometimes worth it if waiting those extra weeks would cause real problems.