How to Get Your Tax Refund by Direct Deposit

It's Fast and Convenient, But Mistakes Can Cost You Your Refund

Direct deposit check on desk
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Who isn't eager to receive their tax refund? You can wait around at the mailbox for a paper check to snail mail its way to you, or you can have some or all of your federal tax refund directly deposited to your bank account. The Internal Revenue Service can electronically transfer your tax refund to your bank account—all you have to do is ask. 

How to Request Direct Deposit

To request direct deposit of your refund, you must indicate your bank's routing transit number, your bank account number, and the type of account (checking or savings) on your tax form. The IRS will electronically send your entire refund to that bank account.

You can enter this information on lines 20b, 20c and 20d of the 2018 version of Form 1040 (only the draft version was available at the time of writing). If you want portions of your refund directly deposited into multiple bank accounts, use Form 8888 to split your refund among two or three different accounts.

Triple Check Your Bank Account Information Before Filing 

The IRS is not responsible for errors you make when entering your bank account information on your return or on Form 8888. It has no liability if your refund goes to John Doe because you transposed numbers or entered the wrong digits. Moreover, the IRS will not cancel payment of your refund and send a second payment to the correct account. 

If you catch an error in time, you can call the IRS at 1-800-829-1040 from 7 am to 7 pm, Monday through Friday, to stop the direct deposit. The IRS might catch some mistakes, such as an omitted number so the account or routing number is one digit short. In this case, your return will not pass the validation check and you will automatically receive a check by mail instead. The same applies if your bank refuses the deposit for some reason.

Paper refunds are covered by the Check Forgery Insurance Fund (CFIF). The CFIF is a fund that settles non-receipt claims. Refunds issued via direct deposit are not covered by the government's Check Forgery Insurance Fund. According to the National Taxpayer Advocate: "If the taxpayer or the taxpayer’s agent gave incorrect account information, neither FMS nor IRS will assist the taxpayer with recovering the funds, and the taxpayer is free to pursue civil actions."

What to Do If Your Refund Is Sent to the Wrong Bank Account

If the numbers indicated on your tax return are correct but you did not receive your direct deposit, call the IRS and ask them to initiate a refund trace to recover your money. If the routing number you indicated on your return is incorrect, contact the bank at which your refund was deposited. You can identify it by looking up which bank is associated with the routing number you entered. This information is available online

Contact the ACH manager at that bank to see if you can persuade him to send the refund back to the IRS, then call the IRS to alert them that the deposit will be coming back. Taxpayers may want to consult with an attorney to review their options for taking legal action to recover a refund that was directly deposited into the wrong account.

What to Do If Your Tax Preparer Alters Your Direct Deposit Bank Information

The National Taxpayer Advocate has indicated that some tax preparers are altering the direct deposit bank information to divert funds into their own accounts. This is fraud. Tax refunds should be directly deposited only into the taxpayer's bank account. Contact an attorney to review your options for taking legal action to recover your refund if this happens to you. Learn about the verification system for tax returns