TurboTax does not use a single bank for all refunds
TurboTax itself is not a bank and does not hold your money. When you file through TurboTax and choose direct deposit, the IRS sends your refund to whichever bank account you specify on your tax return. TurboTax is the software that helps you prepare the return; the IRS processes it and controls where the money goes.
If you use TurboTax's Refund Advance feature (a short-term loan against your expected refund), that loan comes from a partner bank, not from TurboTax. The partner bank changes year to year and varies by state. You will see the bank's name during the loan application process in TurboTax, and you can decline the loan and wait for the IRS refund instead.
The confusion often arises because TurboTax offers features that involve banking partners, but none of them mean TurboTax is your bank or that your refund goes to TurboTax's account first.
Key Takeaways
- Your IRS refund goes directly to the bank account you enter on your tax return, not to TurboTax or any TurboTax partner.
- If you use TurboTax's Refund Advance loan, the lending bank is shown to you during the application and changes each year.
- TurboTax may charge a fee for Refund Advance, and the loan is repaid from your refund when it arrives.
- You can choose any bank for your direct deposit refund; TurboTax has no say in which bank receives it.
How direct deposit works when you file with TurboTax
During the filing process, TurboTax asks you for your bank account details: routing number and account number. You provide these details on your return, and TurboTax transmits them to the IRS as part of your tax filing. The IRS then uses those details to send your refund directly to your bank.
This is the same process whether you file with TurboTax, a tax professional, or by hand. The bank account is yours to choose. You can use a checking account, savings account, or even a prepaid card account that has a routing number. TurboTax does not restrict which banks you can use.
The refund typically arrives within 21 days of the IRS accepting your return, though it can take longer if there are errors or if the IRS needs to verify information. You can track your refund status using the IRS's "Where's My Refund?" tool on irs.gov, not through TurboTax.
What Refund Advance is and which bank provides it
Refund Advance is an optional short-term loan that TurboTax offers. You borrow money against your expected refund and receive it within one to two business days, rather than waiting for the IRS. The loan is repaid automatically when your actual refund arrives.
The bank that makes the loan is a partner of TurboTax, and it changes each year. In recent years, partners have included Pathward National Bank and other financial institutions. When you apply for Refund Advance in TurboTax, the software shows you which bank is offering the loan and what the terms are. You can see the fee (usually $0 to $89 depending on the year and your refund amount) before you commit.
Refund Advance is not a requirement to file with TurboTax. It is optional, and you can decline it and wait for your IRS refund instead. If you decline, your refund goes directly to your bank account as described above.
Why TurboTax partners with banks for certain features
TurboTax offers a few features that require a banking partner because they involve holding or lending money. Refund Advance is the most common. Some versions of TurboTax also offer a TurboTax Debit Card, which is a prepaid card issued by a partner bank that can receive your refund.
These partnerships exist because TurboTax is software, not a financial institution. It cannot lend money or issue cards itself. The partner banks handle the actual financial transactions. TurboTax earns a fee from the partner bank for referring customers, and you may pay a fee to use the service (or it may be free, depending on the product).
None of these partnerships change where your refund ultimately comes from: the IRS. They only change how quickly you can access it or what account type receives it.
Choosing your own bank for direct deposit
You are not limited to any bank when you file with TurboTax. During the filing process, enter the routing number and account number of any U.S. bank, credit union, or prepaid card provider that accepts ACH deposits. The IRS will send your refund there.
If you do not have a bank account, you can open one at most banks and credit unions with minimal documentation. Some banks offer accounts with no minimum balance and no monthly fee. You can also use a prepaid card, though some charge fees for receiving deposits or checking your balance.
The only requirement is that the account must be in your name or jointly in your name and your spouse's name (if filing jointly). You cannot direct your refund to someone else's account.
What happens if you enter the wrong bank details
If you enter an incorrect routing number or account number on your return, your refund will be sent to the wrong account. The IRS cannot redirect it once it has been sent. You will need to contact the bank that received the money and ask them to return it, or contact the IRS to file a claim.
The IRS has a process for this, but it can take weeks or months. To avoid this, double-check your routing number and account number before you file. You can find your routing number on your bank's website, on a check, or by calling your bank. Your account number is also on your checks or available through your bank's online portal.
TurboTax does not verify that the bank details you enter are correct before submitting your return. It is your responsibility to ensure they are accurate.
Frequently Asked Questions
Can I change my bank account after I file with TurboTax?
No. Once your return is filed and accepted by the IRS, you cannot change the bank account through TurboTax. If you need to redirect your refund, you must contact the IRS directly. Call the IRS at 1-800-829-1040 or use the "Where's My Refund?" tool on irs.gov to see your options.
Does TurboTax charge a fee to use direct deposit?
No. Direct deposit itself is free. TurboTax may charge a fee for filing (depending on which version you use), but that fee is separate from direct deposit. Refund Advance, if you choose it, does carry a fee, but that is optional.
What if I use TurboTax's debit card to receive my refund?
The TurboTax Debit Card is a prepaid card issued by a partner bank. Your refund is deposited to that card account instead of a traditional bank account. You can then spend the money or transfer it to your regular bank. The card may have fees for certain transactions, which TurboTax discloses when you sign up.
Is my refund safe if I give TurboTax my bank details?
Yes. TurboTax uses encryption to protect your information during filing. Your bank details are transmitted securely to the IRS. TurboTax does not store your account number after filing. The IRS uses your details only to deposit your refund; it does not charge your account or make withdrawals.
Can I split my refund between two banks?
Yes. The IRS allows you to split your refund among up to three accounts. During the filing process in TurboTax, you can specify the amount or percentage that goes to each account. Each account must have a valid routing number and account number.