Glitch Puts Thousands of Tax Refunds on Unwanted Prepaid Cards

April 2, 2014, Written By Justin Hefner
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Nearly 8,000 taxpayers in Louisiana are receiving their tax refunds on prepaid debit cards this tax season, even though they asked for direct deposits. A glitch in the system sent out thousands of prepaid cards to the wrong taxpayers, and the state is scrambling to make amends.

This may not seem like a big problem because the taxpayers are still getting their money. The issue is the fees associated with prepaid cards. The people who requested direct deposits were not going to have to worry about these fees because the money was going straight into their bank accounts. Now, they could lose a small but noticeable portion of their refund because they are instead receiving these prepaid cards.

The state of Louisiana has offered to cancel the cards and issue refund checks to all of the taxpayers affected by the glitch. However, that will delay the funds for those who need the money to pay bills and make necessary purchases.

There have been no other reports of glitches in other states, but it may be something to watch for if you have not yet received your tax refund. If you receive a prepaid card in the mail after expecting a paper check or direct deposit, contact your local IRS office.



The information contained within this article was accurate as of April 2, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.