Correct, if you have your TurboTax fees deducted from your refund, the only way to process that is to send your refund to a TurboTax banking partner. That is because the IRS will not split your refund with TurboTax or anyone else. Nearly all the consumer tax preparation companies use the same bank, in fact. That bank opens a temporary account in your name, subtracts the TurboTax fees and their service charge, forwards the rest of the money to your regular account, and closes the temporary account.
During the first round of the stimulus, that bank agreed to work with the IRS to re-open the temporary accounts, and forward the payments to the original customers, even though that was a violation of banking security laws. For the second round of the stimulus, the bank is refusing to process any stimulus payments and is bouncing them all back to the IRS. I don’t blame them, for various reasons, and in fact since the IRS knows exactly which customers used this process, the IRS never should have attempted to make the deposit in the first place and it is the IRS’s mistake that is ultimately responsible for this problem.
If the IRS had directly mailed checks or debit cards to affected customers as they were supposed to, the customers would probably have the checks in the mail before January 15. Customers for whom the IRS tried to make improper deposits, will probably not get their checks before the 15th and can claim the credit on their tax return.
