Lesson 2: Direct Deposit Forms

New Direct Deposit Account Setup

Review any direct deposit authorization form for essential information and completeness before setting up the direct deposit.

In addition to the signature and legible bank account information, each form must have the International ACH Transaction (IAT) question answered.

What is an International ACH Transaction (IAT)?

An International ACH Transaction (IAT) is an ACH transaction sent to a foreign financial institution. State agencies are required to do their due diligence not to make payments to an entity that intends to send their funds to a financial institution outside of the United States.

The IAT question

To aid in that effort, all direct deposit authorization forms used in the state must contain an IAT question for the payee to answer. If the payee answers “yes” to the question on forwarding the payments to a financial institution outside of the U.S., they must complete the ACH (Direct Deposit) Payment Destination Confirmation form (74-227) and return it to the state agency along with their direct deposit authorization form.

When 100 percent of payment is sent outside of U.S.

If the payee indicates on form 74-227 that 100 percent of the payment should be sent to a financial institution outside of the U.S., they cannot have direct deposit as a method of payment and the state agency should place a Y in the IAT indicator on the payee’s master record in TINS.

When less than 100 percent is sent outside of U.S.

If the payee indicates they plan to forward less than 100 percent of the payment to a financial institution outside of the U.S., the agency can proceed with setting up and making direct deposit payments to the payee’s domestic financial institution. In this case, the agency does not need to update the IAT indicator.

Comptroller’s office resources

The Comptroller’s office has direct deposit forms for state agency use on FMX, including the ACH (Direct Deposit) Payment Destination Confirmation form (74-227). The steps for setting an IAT Indicator in TINS are covered in the Online Data Entry Screens section of TexPayment Resource.

For questions on IAT, agencies can contact the Comptroller’s Payment Services section at (512) 936-8138 or TINS.mail@cpa.texas.gov.

Next: Form 74-176