Learn More/FAQ
What if the taxpayer doesn?t have a ready savings account? Then he or she must establish one prior to submitting the tax return. Or, as a partner in this endeavor, H&R Block has established special accounts for this purpose that require no minimum amount, no set-up or maintenance fees and they can be established on-site if tax preparation is facilitated at an H&R Block office.
What happens if there is a mistake in the amounts designated for direct deposit on the return? The order in which clients list accounts could make a difference if the IRS needs to reduce refund amounts to allow for mistakes on returns, refund offsets for delinquent federal taxes or to withhold the EITC portion of refunds pending eligibility verification. Clients may want to list the account used for immediate living expenses first. If the IRS must reduce a refund, the agency will use a bottom-up rule and first deduct the difference from the amount designated for the last account. If the difference exceeds the amount designated for the last account, the IRS will deduct the remainder from the amount designated to the next account, etc. EXAMPLE: The taxpayer?s return shows a refund of $300, and the taxpayer asks the IRS to split the refund among three accounts with $100 to each account. Due to a math error, the refund is decreased by $150. The IRS will adjust the taxpayer?s direct deposits as follows: Requested Actual direct deposits Account 1: $100 $100 Account 2: $100 $50 ($100 requested less $50 adjustment) Account 3: $100 $0 ($100 requested less $100 adjustment)
If the IRS withholds the EITC portion of a refund and later determines the taxpayer is eligible to receive the credit, the IRS will deposit the withheld amount into the first account listed.
Taxpayers will receive letters from the IRS explaining any adjustments to their returns, refund amounts and direct deposits. Information about refund adjustments also will be available through Where?s My Refund? On www.irs.gov or by calling 1.800.829.1954.
Note: If a taxpayer owes delinquent state income taxes, back child support or delinquent non-tax federal debts such as student loans, etc., the Department of Treasury?s Financial Management Service (FMS), which disburses IRS refunds, may offset the refund for the delinquent account. This can occur whether taxpayers receive their refunds via paper check or direct deposits to one or more accounts.
In the case of split refunds, FMS will deduct the past-due amounts from the payment that appears first on the payment file received from the IRS (the IRS payment file orders accounts from the lowest to the highest routing number). If the debt exceeds the payment designated for the account that appears next, they will proceed through the accounts in the order in which the payment files were received.
Taxpayers will receive letters from FMS explaining any offset amounts, the agencies receiving the payments, the address and telephone number of the agencies and amounts of their refunds or direct deposits offset. Taxpayers who dispute the debts should contact the agencies shown on the notice, not the IRS, since the IRS has no information about the validity of the debt. Information about refund offsets also will be available through Where?s My Refund?
When electronically filing and requesting direct deposit, taxpayers can receive funds within two weeks.