$40 Refund Procesing Service Fee

[Bolt24]

Can anyone figure out why Turbo Tax Deluxe is now charging a $40 Refund Processing Service Fee when you go to file your federal tax return? I paid for Turbo Tax Deluxe, the agent on the phone hung up on me when he couldn't answer when I pushed pack for detail. Before hanging up, he said there is a form you can submit to get a refund of the $40 refund fee- but the website doesn't say that anywhere. How do many thousands of consumers know about that unless they take the time to call? I have been using Turbo Tax for years, always have a refund and have never been charged a processing fee for the refund before. As far as I know - the IRS processes the refund- not TT. Does anyone have any insight as to why this is being charged?

[xmasbaby0]

There has been a $40 refund processing fee in effect for many years when you choose to pay your TurboTax fees by having those fees deducted from your federal refund.   If you owe any sort of fees for using TurboTax and you choose to have those fees deducted from your refund instead of paying upfront with a credit or debit card, you are agreeing to have the IRS send your refund to a third party bank.  That third party bank takes out the amount you owe to TurboTax, pockets the $40 fee, and sends the rest of your refund to you.

BEFORE you file, you can remove that refund processing fee and pay using your own credit or debit card.

What is Refund Processing Service?

REMOVE REFUND PROCESSING FEE

https://ttlc.intuit.com/questions/1900517-how-do-i-remove-refund-processing-fees-in-turbotax-online-...

[Bolt24]

Thank you for clarifying. I chose to pay my electronic state filing fee by credit card and that cleared it. However the "Refund Processing fee" is a misnomer - the fee pertains to me having my state E-Filing fee deducted from my refund. It has nothing to do with processing a refund. They need to change the name or be more descriptive as it's confusing.

[xmasbaby0]

Users of desktop software always need to be aware of the state e-filing fee.  The software may include the program to prepare a state return, but there is a fee to e-file the state.  That fee is $20 prior to March 1; as of March 1 it increases to $25.   You can avoid the state e-file fee by printing and mailing the state return.

But.....if you choose to pay that $20 from your refund instead of just paying it with a card before you e-file, you have just tripled the cost of e-filing your state return.   

[VolvoGirl]

Yes the name is correct.  If you want the $20 state efile fee deducted from your federal refund then your federal refund is processed though a 3rd party bank to take the fees out for a Extra $40 Refund Processing Service charge (45 in California).   It is also called Pay with Refund.  

[Beaverl]

I notice this also and will have further questions about it as I advance toward filing.  My problem is that when i select to pay the State filing fee by Credit Card, I only am presented with my Mailing information but with no option to advance to entering CC details.   The option to have the state fee deducted from federal refund leads to a lengthy legal document and the $40 fees.   I may end up printing and mailing my State return.

[CatinaT1]

Try disabling your main internet browsers pop up blocker before getting to the payment page.

[frv]

What are you jerks charging this fee for what is suppose to be a free fed filing? Never again. I will go to another package. This is wrong and costly... to you because I just saw on X that people are outraged. Never again, dude. I will never again purchase your software after 10 or more years of use. Good day.

[xmasbaby0]

@frv 

WHY DO I HAVE TO PAY?  I WANT THE FREE EDITION

The information that you can enter in Free Edition is pretty limited now.  Thanks to the new tax laws that began for 2018 returns, there are no more simple Form 1040EZ or 1040A's.  Everything goes on a Form 1040 that has three extra "schedules" with it, and if you need any of those schedules, you are not able to use the Free Edition.  Using the standard deduction instead of itemizing does NOT mean you will not need any of those schedules.https://ttlc.intuit.com/questions/4511011-what-happened-to-the-1040a-and-1040ez   If you started in the Free Edition and entered any data that required any of those three schedules, you have to upgrade to a paid version and if you are watching the screens carefully you are alerted to the upgrade.

When you chose to “start”  in the Free Edition —

Directly below the words “Free Edition” there is a blue link that says “For simple tax returns only”   If you click that link it brings up this information:

You can file with TurboTax Free Edition if you have a simple tax return.*

*A simple tax return is Form 1040 only.

Situations covered in TurboTax Free Edition include:

• W-2 income
• Limited interest and dividend income reported on a 1099-INT or 1099-DIV
• Claiming the standard deduction
• Earned Income Tax Credit (EIC)
• Child tax credits
• Student Loan Interest deduction

Situations not covered in TurboTax Free Edition include:

• Itemized deductions
• Unemployment income reported on a 1099-G
• Business or 1099-NEC income
• Stock sales
• Rental property income
• Credits, deductions and income reported on schedules 1-3

How does TurboTax make any money?

Customers with more complex tax situations will file with our paid TurboTax products that provide all the additional forms and guidance they need. We also offer additional benefits that go beyond filing your taxes, but they are optional and are not required to file simple taxes for free. We hope that, over time, as our customers with simple returns need more capabilities as their financial situations change (for example owning a home, having a child, managing investments), they have loved our products and services so much that they will choose our paid TurboTax offerings to prepare and file their returns.

Or—-Use this IRS site for other ways to file for free.  There are 8  free software versions available from the IRS Free File site

https://apps.irs.gov/app/freeFile/

Or—if you live in certain states you may be eligible to use the new IRS Direct File

( AZ, CA, FL, MA, NH, NV, NY, SD, TN, TX, WA, WY )

https://directfile.irs.gov/

How can I see my TurboTax  fees? 

  https://ttlc.intuit.com/questions/2565973-how-do-i-review-my-fees-in-turbotax-online

If your TurboTax fees are higher than expected, you can reduce them by removing add-ons     (BEFORE you e-file) :

• Remove Premium Services
• Remove MAX Defend & Restore
• Remove a state
• Remove PLUS Help & Support
• Remove Pay With Your Refund

[Nburris915]

Me either I will never use turbo tax again.  I have never been charged a processing fee. I definitely would not have wasted my money on this program. After buying the deluxe version having to pay for state and now a processing fee What a joke 

bye turbo tax 

[VolvoGirl]

@Nburris915  Did you buy the Desktop program?

There is a lot of confusion about this. For the Desktop Deluxe and above it's a free download of one state PROGRAM, not a free state efile. You can prepare unlimited federal and unlimited state returns. Some people need to file in more than one state so they have to buy another state program.

You can print and mail the state for free or each state return including the first one is $25 to efile.   Except New York is free to efile state. Check the box or online description. It should say Federal + Efile + State. Not state efile.

Although if you buy Deluxe in the stores it comes 2 ways, Deluxe with a state and Deluxe without state for states that do not have an income tax. So be careful which Deluxe you buy.

And be careful to pay the fee with a credit card. If you have it deducted from a federal refund there is an EXTRA $40 (45 in California) processing charge. You have to be careful what you click on when you file, go slowly. There is one screen that can trip you up. People get going to fast and click the bottom right button to continue. But to pay by credit card you need to check the Left button.

[Nburris915]

I got the Mac desktop version with the one free state download included. I understand there is a fee for the state efile but why is there a processing fee?  And for what 

[xmasbaby0]

Do not fall prey to the offer to have the $25 state e-file fee deducted from your federal refund or you will be socked with an extra $40 refund processing fee.   Pay the $25 upfront before you e-file by using a credit or debit card.

[alanealive]

Truly Diabolical!! Fees and Fees not explained!! What the F!!!