Some Stimulus Checks Going Straight to Creditors: USA Today

Some $2 billion in economic stimulus checks are going to pay off delinquent debts before the taxpayer ever sees them, according to a report in today’s USA Today.

The story says the Treasury Department has seized 1.8 million of the checks before they were distributed to pay money the taxpayers owed to state governments. The Treasury Department didn’t return calls to insideARM before deadline.

States and federal agencies send lists of delinquent accounts to the Treasury Department, a program that started in 2001. These lists are then cross-checked before stimulus payments go out in the mail or are deposited electronically, according to the USA Today report. The same is true of traditional tax refunds.

More than half (55 percent) of the confiscated money is being used to pay child support, according to the article. Another 39 percent is going to pay for federal debts, including student loans. Another 6 percent is going to pay delinquent state taxes.

Taxpayers are notified via letter if their stimulus checks are seized to pay delinquent accounts.