On September 2, 2010 the IRS announced that they will launch a new pilot program that will promote tax refund cards for unbanked and underbanked tax payers as a safe and inexpensive option when accessing their refund money. During the year of 2009 tax refund cards gained popularity and this is a trend that shows no signs of slowing down. Companies like Green1040 and H&R Block are proof of this new trend. The cards offer an easy way of receiving one’s tax refund money as well as an alternative way for direct deposit. The U.S. Department of the Treasury plans to offer cards that can be used throughout the year for multiple monetary purposes. See below.

“The pilot program will start during the 2011 tax return filing season. The Treasury Department will contact eligible taxpayers by direct mail and by a “payroll outreach” program where the Treasury will team up with companies to insert offers in paychecks and paystubs of people who do not currently use direct deposit for their paychecks.”

The cards are assigned to unbanked tax payers with a linked routing and account number. This allows the tax payers to receive their refund via ACH instead of a paper check. Once the card has been assigned to the tax payer, they can have their paychecks direct deposited to the card as well. The funds can be accessed via the ATM and POS.

The tax debit card goes hand in hand with the “going Green” movement. By using a tax debit card, we are cutting less trees and saving energy. By allowing direct deposit payments, the card also provides convenience. The unbanked customers no longer have to stand in lines to cash their checks or pay check cashing fees. The card is reusable and can be used up to 3 years. It also helps strengthen their financial future by storing their money safely and building savings.