You can tell the IRS to hold your refund and apply it to next year's tax bill instead of sending it to you
When you file your tax return, you have the option to request that your refund be applied to your 2025 tax year instead of being sent to you as a payment. This is called applying your refund forward. You make this choice on your return itself — there is no separate form or request needed after you file. The IRS will not send you money; instead, they will credit the amount to your next year's account.
This option works the same way whether you file on paper or electronically. You simply indicate on your return that you want the refund applied to next year rather than refunded to you. The IRS processes this instruction when they process your return.
Key Takeaways
- You request a refund carryforward on your current tax return by checking a box or writing a note on the form — the choice is made when you file, not after.
- The IRS will credit the full refund amount to your next year's tax account, reducing what you owe or increasing any future refund.
- If you file electronically, your tax software will have a checkbox for this option; if you file on paper, you write the request in the margin or on Form 1040-V.
- Once the IRS accepts your return, the refund carryforward cannot be reversed — you cannot ask for the money to be sent to you instead.
- The credit applies only to federal taxes, not to state taxes, even if you file both at the same time.
How to request the carryforward when you file electronically
If you use tax software to file electronically, the program will ask you near the end whether you want your refund sent to you or applied to next year. The exact wording varies by software — some say "apply to next year's taxes," others say "carry forward," and some use "credit to next year." Look for this question in the refund section of your return, usually near where you enter your bank account information for direct deposit.
Check the box or select the option that says you want the refund applied forward. The software will then show your refund amount as a credit on your 2025 return preview. When you submit the return electronically, this instruction goes to the IRS along with the rest of your filing.
If you are unsure whether your software offers this option, search the help section for "apply refund to next year" or "carryforward." Most major software packages (TurboTax, H&R Block, TaxAct, FreeTaxUSA) include this feature.
How to request the carryforward when you file on paper
If you file Form 1040 on paper, you can write a note requesting that your refund be applied to next year. Write it clearly in the margin near the refund line or on the back of the form. The note should say something like: "Apply refund to 2025 tax year" or "Carry forward refund to next year."
Some taxpayers also file Form 1040-V (Payment Voucher) along with their return. If you are mailing a check or money order, you can write the same request on Form 1040-V. The IRS will see the note when they process your return.
Mail your return to the address shown in the Form 1040 instructions for your state. Keep a copy for your records. The IRS will confirm the carryforward when they accept your return, though this confirmation may take several weeks.
What happens to the credit once the IRS accepts your return
Once the IRS processes your return and accepts your refund carryforward request, the amount is held in your tax account. You will not receive a check or direct deposit. Instead, when you file your 2025 return, the IRS will automatically apply the credit to any taxes you owe for that year.
If you owe $800 in federal taxes for 2025 and your carryforward credit is $1,200, the IRS will subtract the $1,200 from what you owe, leaving you with a $400 credit. That $400 will then be refunded to you or carried forward again if you request it.
If you do not owe any federal taxes in 2025, the full credit will be refunded to you when you file that year. The credit does not expire — it will be applied or refunded whenever you next file a federal return.
Why you might choose to carry forward instead of taking the refund now
Some people use this option to reduce their tax bill for the following year without having to make estimated tax payments. If you are self-employed or expect to owe taxes in 2025, applying your 2024 refund forward can lower what you owe when you file next year.
Others use it as a forced savings method — by not receiving the refund, they avoid spending it. The money stays in the government's hands until next year's filing, at which point it either reduces their tax bill or is refunded to them.
This option can also be useful if you expect your income or filing status to change in 2025 in a way that will increase your tax liability. Carrying forward a refund now gives you a credit to offset that increase.
You cannot reverse the request after the IRS accepts your return
Once you file your return with a carryforward request and the IRS accepts it, you cannot change your mind and ask for the refund to be sent to you instead. The decision is final. This is why it is important to be certain about your choice before you file.
If you realize after filing that you made a mistake, your only option is to file an amended return (Form 1040-X) for that tax year. An amended return can reverse the carryforward request, but it must be filed within three years of the original return's due date. Filing an amended return takes additional time and may delay any refund you are owed.
How the carryforward affects your 2025 tax filing
When you file your 2025 return, you will report the carryforward credit as a payment you made toward your 2025 taxes. The IRS will have already recorded it in their system, so if you file electronically, the software may pull it in automatically. If you file on paper, you will need to list it on your return as a payment.
The credit reduces your total tax liability for 2025. If the credit is larger than what you owe, the difference is refunded to you. If you owe more than the credit covers, you pay the remaining balance.
You can request another carryforward on your 2025 return if you want to apply any remaining refund to 2026. The process is the same as it was for 2024.
State taxes and carryforward requests
A federal refund carryforward does not automatically apply to your state taxes. Each state has its own rules about whether you can carry forward a state refund to the next year. Some states allow it, some do not, and some have different procedures than the federal government.
If you want to carry forward your state refund, check your state's tax agency website or ask your tax software whether the option is available. You may need to make a separate request for your state return, even if you are carrying forward your federal refund.
Frequently Asked Questions
What if I file my 2024 return but do not request a carryforward — can I ask for it later?
No. The carryforward request must be made when you file your return. If you did not request it and the IRS has already sent your refund, you cannot ask them to reverse it and apply it to next year instead. You would need to file an amended return to change this, which is more complicated than requesting it initially.
Does the carryforward credit earn interest?
No. The IRS does not pay interest on refunds that are carried forward to the next year. The credit sits in your account at face value until it is applied or refunded.
What if I move or change my address between now and when I file next year?
The carryforward credit is tied to your Social Security number, not your address. As long as you file your 2025 return using the same name and SSN, the IRS will apply the credit automatically. You do not need to notify them of an address change for the credit to work.
Can I carry forward a refund if I file jointly with a spouse?
Yes. If you file a joint return and request a carryforward, the entire refund is credited to your joint account for next year. When you file your 2025 return, the credit applies to your joint tax liability for that year, regardless of whether you file jointly again.
What happens to the carryforward if I do not file a return next year?
If you do not file a 2025 return, the credit remains in your account indefinitely. It will be applied whenever you next file a federal return. There is no deadline to use it, but you must file a return to claim it.