Opus 17
Level 15

Other financial discussions

If you used refund transfer to have your fees deducted from your refund, that means your refund was sent to Turbotax's bank SBTPG, to open a temporary account in your name, receive the refund, subtract the fees, forward the rest of the money to your regular account, and close the temporary account.


That means that the IRS never had your real banking info, just the temporary closed account.  The IRS had a web site open through October where you could have updated your banking information.


The IRS should not try to make deposits into these closed accounts, because they know which banks provide this service.  During round 1, when the IRS mistakenly sent stimulus payments to SBTPG, SPTBG tried to match them to their customers and forward the money.  However for round 2, SBTPG has decided to bounce all payments back to the IRS for security reasons.


So if you used refund transfer to pay your fees, and if you never updated the IRS with your banking information, the IRS should recognize this fact and mail you a check or debit card.  If the IRS makes a mistake and tries to do a direct deposit, it will bounce, and the IRS would normally mail a check or debit card later, but it takes longer.


The new law says the IRS can only make payments until January 15. After that, if you don't receive a deposit, check or debit card, you can claim the rebate as a credit on your tax return and it will be added to your refund. 


Refund transfer is a terrible product -- not only is it overpriced, but putting a bank you don't know in between you and the IRS is always a bad idea.  In 2020, it turns out to be a galactically bad idea. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*