Posted on April 16, 2020
The Treasury Department today reported that a large amount of recovery rebates, considered tax refunds, have gone out to taxpayers this week: roughly $150 billion. Those are amounts that were direct deposited into individual’s bank accounts. Some more direct deposits and all amounts in check form are still to come. Although amounts began flowing into individuals bank accounts on Monday, today’s Treasury Department release of the Daily Treasury Statement (for yesterday’s activity) was the first clear accounting of the amount. Technically, the amounts reported today, almost exactly $150 billion, could include some normal refunds from tax return filings, but those amounts on Wednesdays are typically on the order of $5 billion or so. Clearly today’s refunds were swelled by the rebates, enacted late last month in the CARE Act, of up to $1,200 per taxpayer plus $500 per dependent younger child.
The amounts reported today look in line with what Congressional estimators and the Treasury Department have been saying. The Joint Committee on Taxation, the part of Congress responsible for estimating the effects of tax legislation under consideration, estimated last month that the rebates would total $292 billion. Today’s tranche of $150 billion would be about half of that, and the Treasury Department has said that about 80 million or more of refunds were going out by Wednesday of this week, which would be about half of the 150 million to 170 million taxpayers expected to receive such rebates when all is said and done.
In past rebates, most recently in 2008, the Treasury Department reported in the Daily Treasury Statements each day exactly how much of total refunds paid to individuals were from the rebates. They reported it in footnotes. There was no such footnote today, or any day this week, in the daily statement. We’ll cut the Treasury Department and IRS some slack given the difficulties they must be facing in getting the money out and accounted for so quickly. We can assume that most all of the total individual refunds reported in the daily statement for yesterday are from the rebates, considering that last week on Wednesday about $4.5 billion in refunds went out in electronic transfers, and just under $6 billion on Wednesday the week before. Wednesdays are typically the biggest day for direct depositing of refunds, but not anywhere near the order of magnitude of this Wednesday’s amount. And amounts reported for Monday and Tuesday of this week were near very small frictional levels totaling about $1 billion.