If a stimulus payment comes in from the Treasury via ACH, and the account number is correct but the type of account is incorrect (savings vs. checking) should you go ahead and post to the persons account, or return the ACH. This type of item goes on our unpost list and we feel that it is an incorrect account and have been returning the item. Is this the correct thing to do?
Thanks for your response.

I am not sure that account type comes into play:

https://www.nacha.org/system/files/2020-04/ACH%20Network%20Rules%20Pandemic%20FAQs%20(April%208,%202020).pdf

If the account number and the customer name matched, we would not return the ACH because of a wrong account type.

Just curious if you have been returning them - what error code are you using?

The best you could do -- and I doubt the IRS will do anything with it -- is send a NOC correcting the account type. But there is no return code that I can find that says "we are returning these funds because you said S instead of C."

In the Green Book, Chapter 6, there are Change Reason Codes for the NOC - C05 - Incorrect Transaction Code (Change from checking to savings or savings to checking), and C06 - Incorrect Account Number and Incorrect Transaction Code (Correct a data entry error in the account information and change from checking to savings or savings to checking).

I guess the question is - is the "Transaction Code" part of the Account Number?

But are you doing a Notice of Change (NOC) or are you doing a Return?

And no, the transaction code is not part of the account number.