eligible financial institution designated by the taxpayer. Qualified
accounts include savings, checking, share draft or consumer asset accounts
(for example, IRA or money market accounts). Taxpayers should not request a
deposit of their refund to an account that is not in their own name (such as
their tax preparer’s own account). The taxpayer may not designate refunds
for Direct Deposit to credit card accounts. Qualified accounts are accounts
held by financial institutions within the United States and established
primarily for personal, family or household purposes. Qualifying
institutions may be national banks, state banks (including the District of
Columbia and political sub-divisions of the 50 states), savings and loan
associations, mutual savings banks and credit unions.
By completing Form 8888, Direct Deposit of Refund
to More Than One Account, the taxpayer may split refunds between up to three
qualified accounts. A qualified account can be a checking, savings or other
account such as an individual retirement arrangement (IRA), health savings
account (HSA), Archer MSA, Coverdell education savings account (ESA) or
TreasuryDirect online account. The taxpayer may also buy up to $5,000 in U.
S. Series I Bonds. For example, a taxpayer expecting a refund of $400 may
choose to deposit $150 into a checking account, $150 into a savings account,
and $100 into an IRA account. Taxpayers may choose the refund splitting
option regardless of which Form 1040 series tax form they file.
Providers should caution taxpayers that some
financial institutions do not permit the deposit of joint individual income
tax refunds into individual accounts or into check or share draft accounts
that are "payable through" another institution. Taxpayers should verify
their financial institution's Direct Deposit policy before they elect the
Direct Deposit option. The IRS is not responsible if the financial
institution refuses Direct Deposit for this reason. Taxpayers who choose
Direct Deposit must provide Providers with account numbers and routing
transit numbers for qualified accounts. The annual tax packages show how to
find and identify these numbers. The taxpayer can best obtain this
information from official financial institution records, account cards,
checks or share drafts that contain the taxpayer’s name and address. The
sole exception involves accounts specifically created to receive refunds
that repay refund products offered by financial institutions. In those cases
Providers may supply the identifying account data.Providers with repeat customers or
clients should check to see if taxpayers have new accounts. Some software
stores prior year’s information and reuses it unless it is changed. If
account information is not current, taxpayers do not receive Direct Deposit
of their refunds.Providers
must advise taxpayers that they cannot rescind a Direct Deposit election and
they cannot make changes to routing transit numbers of financial
institutions or to their account numbers after the IRS has accepted the
return. Providers must not alter the Direct Deposit information in the
electronic record after taxpayers have signed the tax return.
Refunds that are not direct deposited because of
institutional refusal, erroneous account or routing transit numbers, closed
accounts, bank mergers or any other reason are issued as paper checks,
resulting in refund delays of up to ten weeks. While the IRS ordinarily
processes a request for Direct Deposit, it reserves the right to issue a
paper check and does not guarantee a specific date for deposit of the refund
into the taxpayer’s account.Treasury’s Financial Management Service
(FMS) issues federal income tax refunds. Neither the IRS nor FMS is
responsible for the misapplication of a Direct Deposit
