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Stimulus check access a challenge for some low-income Americans

The third round of pandemic assistance began hitting bank accounts last week — but the neediest may face hurdles and delays.
The Internal Revenue Service began processing the third round of pandemic stimulus checks -- $1,400 for many Americans -- on March 12, 2021. Those without bank accounts or records on file could face delays.
The Internal Revenue Service began processing the third round of pandemic stimulus checks -- $1,400 for many Americans -- on March 12, 2021. Those without bank accounts or records on file could face delays. [ MATT ROURKE ]
Published Mar. 23
Updated Mar. 23

ST. PETERSBURG — The calls to the job connection center on 34th Street come every day. Where’s my stimulus check? How do I get it?

The third round of pandemic assistance began hitting bank accounts last week — $1,400 meant to help Americans stay afloat by covering urgent expenses, like food, rent and utilities.

But the neediest may face hurdles to access the money.

Donna McGrath, the manager for St. Petersburg’s Goodwill Job Connection Center, has met people who missed the first and second rounds of stimulus payments.

They fell through the cracks because they don’t have internet at home or a bank account, she said. They’ve moved around or don’t have a fixed home address. They might earn too little to have tax documents on file with the Internal Revenue Service. A few have no personal identification. She starts by helping them track down a birth certificate.

“We break down each of those barriers they are facing,” McGrath said. “Step by step.”

In past stimulus rounds, the payments arrived quickly for most people who had submitted tax returns and had a bank account on file with the IRS.

But it was slow for those who needed it most.

“The thing about people who live below the poverty level is, most of them are not required to file an income tax return,” said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. For the first stimulus rounds, that meant they needed to submit information through an IRS online portal — yet many do not have internet at home, and options for free internet access, like public libraries, have been limited during the pandemic. (The IRS did not respond to questions in time for publication.)

Holtzblatt’s research found that more than 40 percent of adults below the federal poverty level — that’s $26,500 for a family of four — reported not receiving the first stimulus payment by mid-May, a month after they were first sent out.

That was partly due to an additional challenge: Millions of low-income Americans do not have traditional bank accounts.

Many of those households are concentrated in communities of color. About 14 percent of Black households and 12 percent of Hispanic households did not hold a bank account in 2019, according to the Federal Deposit Insurance Corp. In comparison, only 2.5 percent of white households and 1.7 percent of Asian-American households did not. The agency predicted the number of Americans without bank accounts will rise due to the pandemic.

Some households are locked out of the traditional banking system because their credit histories are viewed as too risky — a measurement that has been criticized as contributing to the racial wealth gap.

Others have their own reasons for avoiding mainstream banks, said William Elliot III, a professor at the University of Michigan School of Social Work. Dealing with minimum balance requirements and surprise fees for overdrafts, ATM withdrawal and debit card swipes can be profoundly destabilizing for families teetering on a financial cliff.

“They come to think of them as being more punitive and harder to maintain than the check-cashing services,” Elliot said.

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For those without a bank account, the government payment comes on a prepaid debit card or a paper check. That can mean a delay, allowing debts to pile up. “Every month you are falling further behind, and it’s less likely this amount of money will beat the crisis,” Elliot said.

It also means relying on services that shave off some of the check’s value. For example, cashing the latest $1,400 government check at AMSCOT, a popular Florida financial services company, would cost $26.

McGrath, at the Goodwill center, says local community services — especially those that offer free tax preparation services — can offer assistance to navigate options.

“Knock on wood, we haven’t met anyone yet we haven’t been able to help,” she said.

The Goodwill Job Connection Center at 2550 34th Street N is open Monday - Thursday, 10 a.m. to 2 p.m, and can be reached at 727-282-4478.

The Foundation for a Healthy St. Petersburg provides partial funding for Times stories on equity. It does not select story topics and is not involved in the reporting or editing.

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Resources to track your stimulus payment:

Most U.S. citizens and U.S. residents are eligible for the third round of economic impact payments. (Check income limits here.)

If you have not received your stimulus check yet, here are resources to help you track it down:

1. The IRS has a website to check your payment’s status.

2. If you filed taxes in 2019 or 2020, the stimulus check will be sent to the same account or address on file. If you need to change your address, fill out this form and submit it to the IRS.

3. If you are receiving a check or debit card instead of direct deposit, watch the mail. The payment will come a white envelope displaying the seal of the U.S. Department of the Treasury.

4. If you do not typically file tax returns, you will need to submit a simple return and can also receive the previous stimulus payments by claiming the Recovery Rebate Credit. To receive assistance, locate free tax prep help using the IRS’s Volunteer Income Tax Assistance locator tool.

5. If you want to set up a bank account to receive the stimulus payment, United Way Suncoast recommends these no-overdraft and low-cost BankOn certified checking accounts.