Tax refunds may be delivered via debit cards

Aug 22, 2012

A newly introduced bill would allow Ohioans to receive a pre-paid debit card for their state income tax refund. In an interview with Ohio Public Radio's Jo Ingles, the bill's sponsor, Democratic State Senator Eric Kearney, explains why he thinks it's a good option.

Kearney - It would allow people to receive their income tax return in the form of a debit card.

Ingles - A lot of people would say "hey, you can get a check from the government, they'll put it in your bank account so why do we need these debit cards and does that cost more money?"

Kearney- The debit cards are more convenient. People now use debit cards for just about anything. It's no longer a check society and a lot of people don't have bank accounts. This is just a way in order to provide a convenience to the Ohio taxpayer if the Ohio taxpayer elects to use that option. You don't have to do it. It's just a convenience.

Ingles - But aren't there fees on those debit cards and who would pay that fee?

Kearney - We are working out an arrangement with the major debit card providers so that fee would not be incurred to the state of Ohio or the Ohio taxpayer so that's part of the bill. Many of these card companies that would support these cards like Mastercard and Visa are very excited about the proposal which leads me to believe they would have customers who would utilize them. Typically, it's people who are lower income, younger who may not have bank accounts or whose financial transactions are not as sophisticated who would use these debit cards. It's a convenience thing that allows them to easily use their money in a variety of locations. It would be an example of government understanding the marketplace because people don't use checks anymore and adjusting to the convenience of what people really want. And people also need to know it's an option. If you'd prefer receiving checks from the state of Ohio instead of a debit card, you can still receive checks.

Kearney says six other states allow residents to receive their income tax returns on debit cards. Those states are South Carolina, Louisiana, New York, Georgia, Oklahoma, and Connecticut.