I filed and had fees paid out of my refund.
My understanding is that the IRS will use the Direct Deposit we have on file for Advanced Childcare Tax Credit payments. How will this work if the fees were to be taken out of the refund first? Does the IRS have our correct bank account information? Does anyone know?
The IRS has said that they will create a website where people in your situation can update your bank information to the correct account. It is not ready yet. Check the IRS website every few days.
Thanks, I’m aware of that but I don’t see on that site where it references refund based fees, so I’m not sure how this would apply to my situation. Even on my return it shows the correct bank account. However - my experience with the stimulus payments is that the IRS has our correct info, it’s how Turbo Tax efiles for refund redirection. Maybe someone with Turbo Tax knows.
Either I don’t understand your question, or you don’t understand your situation.
The IRS will not split a refund between the taxpayer and a tax preparation service. The only way that TurboTax or any other service can have the fees deducted from your federal return, is if your tax return is sent to a new bank account that is opened in your name by a bank that has an agreement with TurboTax. The bank opens the account in your name, receives the deposit, subtracts the fees, and then sends the rest of the money to your regular bank account. Even though TurboTax has your correct bank information and may print it on a printed copy of your tax return, the IRS was sent an account number for this new temporary bank account.
If the IRS has made direct refund deposits to your bank account, then they have your bank account information. A refund deposit from the IRS would would be indicated as “US treasury.” However, if you had your fees subtracted from your refund, then the IRS sent your refund to Green Dot bank or SBTG, and the direct deposit of the remained into your account would be indicated as Green Dot or as Tax Products Group or something else but not as US Treasury.