Can I Have My Tax Return Deposited if Both Names Are Not on the Checking Account?

According to a poll, 88 percent of all Americans who will receive an income tax refund choose to have that refund direct-deposited into their checking account. Before you make that decision, you need to know how the IRS, as well as your financial institution, will treat the transaction with respect to who owns the bank account. Violating policies in this case could delay your refund.

IRS Policy

You can request a direct deposit of your income tax refund into an account that is in your name only. You can also arrange for a direct deposit into an account that is owned by your spouse, provided that you filed a joint income tax return. You can also ask for a direct deposit of your income tax refund into a joint account that you are listed as an owner of, regardless of your filing status. You cannot request a direct deposit of an income tax refund into an account that is not owned by either you or your spouse, such as another relative's account.

Your Bank's Policy

While the IRS gives you the option of depositing a joint return into an individual bank account, check with your bank to make certain that it will accept direct deposits this way. Some banks require a refund from a joint income tax return to be deposited into a joint bank account. If you do not check with your bank in advance, it could refuse the refund, causing it to be returned to the IRS. The IRS would then write you a paper check, and your refund would be delayed.

Splitting Direct Deposits

You can also request that your refund direct deposit be split among up to three different accounts. This is useful to place money into checking, savings and even an investment or IRA account. The rules of ownership for any accounts that you choose to direct-deposit into remain the same as if you had the direct deposit placed into one account. You can elect to split deposits among different accounts by using Form 8888. This form also allows you to purchase U.S. Savings Bonds with a portion of your deposit as well.

Reasons to Direct-Deposit

Using direct deposit for your income tax refund means you will receive your refund faster than if you request a paper check. In addition, you do not have to worry about a paper check being stolen from your mailbox, or losing the check before you can get it to the bank. Your tax refund will become available to you to spend without making a trip to the bank to cash or deposit the check.