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Why is my refund direct-deposit or check lower than the amount in TurboTax?

SOLVEDby TurboTax12244Updated December 13, 2023

There are a few reasons why your refund might be less than what was shown in TurboTax.

1. The IRS found a discrepancy in your return.

The IRS reviews the information you entered in your return and compares it with what they have in their database. If there are any discrepancies, they make adjustments accordingly and send your reduced refund.

Some common errors found are incorrect advance Child Tax Credit or stimulus payments amounts, which can cause significant reductions in your expected refund.

The IRS will send you a letter explaining the adjustment, but it usually takes about three weeks to arrive. If you got your refund already, check the IRS Where’s my refund? site to see what they adjusted and how it impacted your refund. It may take several days for the site to be updated.

2. You paid your TurboTax fees with your refund.

When you pay your TurboTax fees with your federal refund, the TurboTax fee plus a separate Refund Processing Service (RPS) fee are deducted from your total refund amount. So your IRS-issued tax refund might be less than the amount shown in TurboTax.

The total cost of the TurboTax fee and RPS fee combined can be anywhere from $39 to $320.

3. The IRS offset your refund.

A refund offset is when the IRS applies part of, or all, your refund toward past-due income tax, child or spousal support, student loans, or state unemployment compensation debts. If this happens, check the IRS Where's My Refund? or the Bureau of the Fiscal Service site for more information. You’ll also get a letter explaining why you didn't get your entire refund.

How to avoid refund discrepancies.

Make sure to enter the exact numbers from all of your forms and any letters you receive from the IRS on your tax return. The IRS compares everything you enter with what they have in their database, and if they find differences, they can adjust your expected refund. If you ever lose a letter you get from the IRS, you can always go to your IRS account to find the info you need. And if you need a new form, you can always reach out to the issuer for a new copy.

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