Direct Deposit

[Kurly]

My Granddaughter has a live in boyfriend, who is also the father of her child. Can he have his Direct Deposit go to her into her checking account? They are in the process of moving and he has no bank account. He has signed a Bank Account Verification form that shows the amount of his refund and the Routing Number and Account Number that will be reflected on his tax return for direct deposit.

Thanks

Kurly

[gkaiseril]

There IRS and bank rules that come into play.

The IRS will only make one direct deposit to given bank account.

Then you have the bank rules. Will the bank where the deposit is going accept the deposit to the account if there is a different name than the account holder? Many banks do not because this could be a misdirected transfer. so unless you know the bank will accept the deposit, you might not find out until the bank rejects the transfer.

[PIGLEE]

The chances are it will be stopped by IRS or most likely the Bank. Then it will take months to get it corrected. I would have it mailed to him, One extra week, but he will have his check. The other option would to open a new checking or savings account right away, and have it deposited to it.

[BP.]

The IRS will only make one direct deposit to given bank account.

Can you tell us if this is a hard-and-fast rule, or maybe something new? I have singles who share bank accts, and I have done each refund into one acct- no feedback from clients that it hasn't worked. But I do make sure deposits go into an acct w/client's name, not the acct of someone else.

[Gene V]

From Pub. 1345

Providers must accept any Direct Deposit election to any eligible
financial institution designated by the taxpayer. The taxpayer may designate refunds
for Direct Deposit to qualified accounts in the taxpayer’s name. Qualified accounts
include savings, checking, share draft or consumer asset accounts (for example,
IRA or money market accounts).
Taxpayers should not request a deposit of their
refund to an account that is not in their own name (such as their tax preparer’s own
account).

Providers should caution taxpayers that some financial institutions do not permit the deposit of joint individual income tax refunds into individual accounts. The IRS is not responsible if the financial institution refuses Direct Deposits for this reason.

[powerage]

did this last year

Before I realized I could not so this, last year my brother's refund was DD to a pre-paid card I have, using TaxAct. We have the same last name and I had his permission, so it went through no problem. This year he got a check.

[ChEAr$]

Irs

rules say that any direct deposit MUST go ONLY to an account of the taxpayer.
So any deposit to a boyfriend/girlfriend/SO/mistress account ist verboten!

In the case of a joint filing however the joint refund may be deposited into a joint
checking account, or either account of the spouses.

I do know that some banks when receiving a direct deposit don't bother to check for such
niceties, simply letting the computers read the numbers and accepting the transfer.

[BP.]

And how about single filers with bank accts titled in the names of more than one person. OK to do more than one deposit into such accts?

[gkaiseril]

The IRS checks for a second deposit to a given RTN and Account number and will only make one deposit to the account.

[David1980]

And how about single filers with bank accts titled in the names of more than one person. OK to do more than one deposit into such accts?

I think the reason they won't do multiple deposits to the same account is because of all the abuse they had by preparers with the 8888 when that got released. Actually, I guess the same abuse probably existed before the 8888 by trying to deposit all refunds into the company bank account and then writing the checks out to customers.

Most of my clients have bank accounts, but I tend to avoid the kind that can't/won't have a bank account.

[BP.]

Thank you gkaiseril & David1980. I routinely do a few of these each year for regular clients who are unmarried but both named on a joint bank acct, and have never heard there's been a problem. Did a pair just yesterday, so fingers crossed all goes well, but we shall see.

[taxea]

As stated above...TP's name must be on account. If a MFJ check both names must be on the account. If two names (different) are on the account both can DD separate refunds into that account.

[ChEAr$]

And how about single filers with bank accts titled in the names of more than one person. OK to do more than one deposit into such accts?

By the rules, the answer is no.

Again, the deposit must be in taxpayers OWN account.

[BP.]

By the rules, the answer is no.

Again, the deposit must be in taxpayers OWN account.

And again, it IS the taxapyer's own acct- more than one taxpayer's own acct- two names on ONE acct. I don't put deposits into an acct NOT in the taxpayer's name. I am just not aware of the rule, nor has it been my experience, that there can only be one deposit per season to an acct.

If two names (different) are on the account both can DD separate refunds into that account.

Thanks. That's all I wanted to confirm, and that does correlate with what I have experienced in prior years.

[ChEAr$]

And again, it IS the taxapyer's own acct- more than one taxpayer's own acct- two names on ONE acct. I don't put deposits into an acct NOT in the taxpayer's name. I am just not aware of the rule, nor has it been my experience, that there can only be one deposit per season to an acct.

Then they' better be married. Strictly speaking, an elderly taxpayer who also has her
daughter's name on the account for convience may not qualify for direct deposit.

By "name on the account", means joint ownership of the account, versus merely being
a signatory on the account.