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Smart Money

Tax Refund Deposited Into the Wrong Account? Here’s What to Do

Most government refunds are deposited into bank accounts each year. Ever think about what happens if your tax refund is deposited into the wrong account? Read on to know what to do if this happens to you.

Rebecca Lake • January 12, 2022

In This Article

  1. What can cause the IRS to send a tax refund to the wrong bank account?
  2. How to avoid tax refund direct deposit errors
  3. How to fix an incorrectly deposited tax refund
  4. What to do with your tax refund
  5. FAQs
  6. Final thoughts

Note: This information is not intended to be tax advice. Consult a tax preparation professional for tax advice.

Filing taxes can be a chore, yet getting a refund can be a sweet reward for your efforts. In 2020, the average taxpayer received a refund of $2,741, which is a good chunk of change to stash in savings, use to pay down debt, or fund another financial goal

The Internal Revenue Service (IRS) encourages taxpayers to have their refunds deposited directly into their bank accounts. Direct deposit is a no-brainer when it comes to getting your funds quickly. Instead of checking the mail everyday and making a trip to the bank, direct deposit has made the process much easier and a lot of people take advantage of it. 

But, the process isn’t perfect. Mistakes happen, and whether you enter the wrong account number or the money is sent to the wrong person, there are ways to resolve the issue and receive your refund electronically. 

What can cause the IRS to send a tax refund to the wrong bank account?

There are a few different reasons why your tax refund might get routed to the wrong bank account. Let’s take a look.

Incorrect information 

1. Wrong account number on tax return

It’s common to make a mistake when filling out important documents such as your tax returns. If you accidentally provide the government with the wrong bank account number for your tax refund, your money could be delayed a little bit. No need to worry as there are ways to fix it, but double-checking that your account number is correct from the start will help avoid unwanted stress later on. 

Transposing a single digit in your bank account number could send your refund straight into someone else’s account. If you’re paying another person to do your taxes for you, double-check to ensure they have your correct account number as well.

2. Wrong routing number on tax return

The same goes for your bank’s routing number when filling out your tax documents. Your routing number is just as important as your account number since it tells the IRS where to send your funds. Messing up a single-digit could derail how fast you receive your money, so double-checking the routing number for your bank when filling out your information is an extra step to take, but well worth it! 

Identity theft

In other instances, a tax refund deposited into the wrong account can be the result of something more serious. For example, a common method of tax identity theft involves getting the jump on taxpayers and filing a fraudulent return using their social security number or tax identification number. According to the Federal Trade Commission (FTC) Consumer Sentinel Network, there were 92,669 reports of employment or tax-related fraud in the first 3 quarters of 2020.

If another person fraudulently files a tax return on your behalf, the IRS will accepts the return in good faith and issue the refund to the person who filed the return —  only it goes to the fraudster’s bank account, not yours.

Typically a bank account will reject a direct deposit that doesn’t match the name on the account. In that case, the money could be sent back to the IRS, and you’d likely be issued a refund in the form of a paper check.

To protect yourself from identity theft and fraudulent activity during tax season, there are some actions you can take to be more cautious: 

  • Keep your online information secure
  • File your tax return as early as possible
  • Keep all your physical and electronic documents for your records
  • Beware of tax scams
  • Choose a reliable and trustworthy tax preparer

To learn more about identity theft when it comes to tax refunds, the IRS’s Taxpayer Guide to Identity Theft provides more information on this topic.

How to avoid tax refund direct deposit errors

If you want to avoid the nightmare of having a tax refund deposited into a wrong account, there’s a simple solution. The best thing to do is double or even triple-check that your bank account information is correct before filing. Again, if you are paying an accountant to prepare your taxes, confirm with them that they have the right numbers documented.

If you submit your tax return and you later find out that there’s an error, you can contact the IRS to update the payment information if the refund hasn’t been issued yet. If it’s too late, you will receive a paper check in the mail instead. 

Getting a paper check can mean waiting 6 to 8 weeks to receive your money, compared to the 3-week wait for direct deposit. But it can be well worth the wait if it means your refund lands in your hands and not someone else’s.

How to fix an incorrectly deposited tax refund

The best way to find out if your tax refund was deposited incorrectly is by using the IRS Refund Status Tracker Tool to help monitor your refund’s progress. If you see that your refund has been marked as deposited but the money isn’t showing up in your bank account, it’s time to start figuring out what went wrong. A good place to start is by contacting the bank or financial institution that accepted the refund, which you can see using the IRS Refund Status Tracker Tool above.

But, you might be thinking, why not call the IRS about a refund? There’s a simple explanation for that.

The IRS takes no responsibility for refunds that are misdirected to another person’s bank account as a result of taxpayer or tax preparer error. In other words, if you contact the IRS about refunds that were incorrectly deposited because of your (or your tax preparer’s) mistake, it won’t be able to help since the funds have now left their office, taking it out of their hands. 

If you do call a financial institution, be prepared to make your case for having the refund amount returned to you. Explain what happened and the error that led to the direct deposit being incorrectly reported. You may also need to provide documentation, such as a copy of your tax return, so keep a record of all of your tax documents just in case. 

If you haven’t had any luck after 2 weeks, you can file Form 3911, Taxpayer Statement Regarding Refund. Submitting this form allows the IRS to reach out to the banking institution on your behalf to find out where the money went and attempt to recover it. This can take up to 90 days, so it’s a good idea to put any plans you had for your refund on hold until you know when and if you are getting your money back. 

If you have no luck after both of those efforts, the last option is to take legal action, which could end up costing you more money than your refund is worth. Talk to a professional or expert in the field before making a decision and weigh your options before moving forward. 

You can also view your refund status within 24 hours after the IRS receives your return or 4 weeks after mailing it in. 

What to do with your tax refund

If you’re receiving a tax refund this year, do you have big plans for the money?

Brainstorming ideas beforehand for how to use your tax refund can help you make the most of it and plan ahead. You may want to use that money for bills or to pay down debt, or save it to establish your emergency fund. A tax refund can be a great way to get ahead financially if you use the funds practically. 

If you are getting ready for a big purchase, like a house or a car, you may consider a high-yield savings account to earn interest while you are saving. There are several choices to make with your money, but knowing what to do with your tax refund can be an easy one as you keep financial goals and success in mind. 

Just remember, there are several different factors that can affect the timing of your refund after it’s filed. The IRS recommends taxpayers to wait until the money is available in your account before making bigger purchases or paying bills.

Did you know?

You can get your federal tax refund up to 5¹ days early when you direct deposit with Chime and file directly with the IRS. Learn More


How do I change my direct deposit information for my tax refund?

It’s possible to change or update your direct deposit information with the IRS for your tax refund; it’s just a matter of if your return has been completely filed already. If you haven’t filed your return, or if the IRS rejected your return, you can likely make adjustments using your tax software or on your tax form.

If you’ve already filed your return and the IRS has accepted it, you’ll need to contact the IRS directly to make any changes regarding your bank account and routing number. If you don’t, your refund risks being delayed, as the IRS will attempt to deposit the funds to the account information provided. If this happens, the bank will likely reject it, which will probably prompt the IRS to mail you a paper check.  

What if my tax refund is sent to a closed bank account?

There isn’t much you can do once you or your tax preparer files your return with the IRS and it’s accepted. For security reasons, the IRS cannot modify the account or routing number listed on the return you filed once it’s accepted. If the funds are sent to a closed bank account, the bank will reject the deposit, and the IRS will then send you a paper check to the mailing address listed on your return.

Why is my refund not showing up in my bank account?

If your tax return has been accepted and completed, it doesn’t mean it has been deposited into your account yet. You can check the status of your refund with the IRS Refund Status Tracker Tool to see if they have posted a deposit date for your return. Occasionally it can take longer, as it depends on your financial institution’s turnaround time. 

If you don’t see the refund on your statement within 14 business days, you can contact your bank to find out why the funds have been delayed. Again, there’s always the possibility that your bank account information is incorrect, so make sure you are keeping track of the progress of your refund to help spot any errors. 

Final thoughts

It’s more common than you think for a mishap to occur when receiving your tax refund electronically. Direct deposit is an easy and efficient way to have access to your funds, however, things can happen that are sometimes out of your control. It’s best to take measures when reviewing your personal information for your tax return to help lessen the potential errors that can happen on your end. 

Filing your taxes can be stressful, and ensuring you receive your funds promptly and correctly can be the most anxious part of the entire process. If your tax refund does end up in the wrong bank account, no need to worry! There are steps you can take to change the outcome of your situation. 


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