ACH credit transfers are electronic deposits from one bank to another. An individual uses these transfers for direct deposit of government benefits, tax refunds, and earnings. These can also be used for your employer or other payer’s tax payments on your behalf.
ACH Credit lets you take in money or pay others electronically. The payer can start a payment to you via his or her bank, and the bank then transmits the payment through the ACH (Automated Clearinghouse) network. You can accept funds or make payments by ACH credit.
Common ACH Credits:
Direct deposits are the most common ACH credits, including paychecks and government benefits such as Social Security. When you redirect your IRS or state tax refund to your bank account, it’s an ACH credit because it moves funds into your bank account.
Can we make payments through ACH Credits?
Yes, you can make payments using the ACH credit method. For example, business owners in Telangana who wish to pay state taxes may set up their bank accounts to transmit a specified payment amount to the state.