Thousands of American citizens will get tax refunds instead of a paper check on a prepaid card as the government looks to give people without bank accounts an easier way to get their money.
The letters will give the option of activating a MyAccountCard Visa Prepaid Debit Card, on which their 2010 federal tax refund would be direct deposited.
The Treasury Department saying it will mail letters to 600,000 low- and middle-income taxpayers next week launched the pilot program Thursday.
“This pilot program will provide low- and moderate-income Americans with a low-cost option for faster delivery of their federal tax refund,” said Deputy Secretary of the Treasury 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,” said Wolin.
Once they open a prepaid debit card, taxpayers can reload it with their own money and use it for everyday transactions without opening a traditional bank account.
Different versions of the prepaid card will be issued — each with different features, marketing messages and fee structures — during the pilot to monitor their effectiveness before the cards are rolled out as a permanent part of the tax filing process.
.Treasury said more than 1.7 million U.S. workers use payroll cards to receive wages. Treasury will also offer tens of thousands of payroll-card the opportunity to direct deposit their 2010 refund onto existing payroll cards.
The Visa card will be issued by Utah-based Bonneville Bank, and the Treasury will work with prepaid financial services company Green Dot Corp. during the pilot.