Here's your income tax refund ... psych

http://www.ajc.com/news/state-tax-refunds-taken-815627.html

 

Jesus Christ. I haven't even gotten a single W-2 yet!

 

Easy to blame the government, but what were the banks' roles in this? Did they allow the government to pull back cleared deposits? Or did the government retract them before they actually cleared the banks? I'd be curious to know the state and federal laws on this issue as it seems like a sketchy situation.

I personally think banks like to credit for "pending" deposits before they actually clear, because they know a few out of a thousand won't clear, and then they might rack up a few overdraft fees on the person receiving the deposit.

 

If you agree to a direct deposit, then you agree that those funds can be withdrawn. Direct deposits don't have to clear like check. They are like wire transfers.

 

IJAG: So you're good then ...

What stitch says. When you sign up for direct deposit, the agreement usually says they have the right to reverse the deposit in such cases where a mistake is discovered. I bet if you check the DD agreement with your employer, you'll find a clause that says exactly that. Now, if the state made a mistake that resulted in this action being taken, I think the state should be liable for resulting fees charged to the taxpayers in question.

 

Several years ago, I had about $10,000 deposited in my account on accident. I didn't know until someone from HR called to tell me about the error.