Entered the wrong bank account in TurboTax or H&R Block: what happens to your refund

What happens if you entered the wrong bank account in TurboTax?

It depends on where the return is. The bank details travel with the return, so you can edit them only while the return is still yours to edit: before you file, or after the IRS rejects it. Once it is accepted, the IRS uses the numbers you typed, and what happens next depends on whether those numbers point to a real account.

Can you change your bank account after filing?

Not through the software. Intuit says that if you have not filed yet you can still change your bank account information for direct deposit. H&R Block says you can update the routing and account numbers if you have not filed or the IRS rejected the return, but that once the IRS accepts it, you will not be able to change your direct deposit information without contacting the IRS.

The IRS draws the line at whether the return has posted to its system. If it has not, you can call 800-829-1040, Monday through Friday from 7 a.m. to 7 p.m., and ask the IRS to stop the direct deposit. Intuit adds that the IRS cannot reroute the refund to a different account over the phone, so stopping it leads to a CP53E notice. If the return has posted and no CP53E has been issued, the IRS says you cannot change your bank account information at all.

Changing a wrong account number in H&R Block before you file

In H&R Block's software, open the return, go to the File tab, choose Direct Deposit, enter the routing and account numbers, then enter them again on the Confirm Your Bank Information screen before you finish filing. The same applies after a rejection; our H&R Block rejected return guide shows how to reopen it.

What is a CP53E notice and how do you answer it?

A CP53E is the IRS letter saying it could not send your refund by direct deposit. The IRS links it to Executive Order 14247, which changed the direct deposit options available. It is sent when the bank details on a refund are invalid, missing or rejected: a number with a missing digit that fails the IRS check, or a mistyped number that passes the check but is returned by the bank.

1. Sign in to your IRS online account, or create one.
2. Open Notifications on your Account Home.
3. Select the Add bank account notification, which appears only when a CP53E has been issued.
4. Follow the prompts to add a correct account.
5. Allow 2 to 5 business days for your refund status to update, then check Where's My Refund.

You have 30 days from the notice to add or update a bank account, or to choose one of the limited exception conditions that allow a paper check. You get only one opportunity to update the account online, so copy the numbers from your bank before you start. IRS employees cannot update bank information for you, including by phone. If you do not respond, the IRS says it will issue a paper check after 6 weeks, and the refund can still be reduced by an offset for other debts.

What if the number belonged to someone else?

This is the hard case. If the deposit lands in another person's account and that bank accepts it, the IRS says you must recover the money through that institution, and that it cannot compel a bank to return funds. Intuit notes that most banks will not deposit tax refunds into accounts where the names do not match, which is why many of these deposits bounce back instead.

1. Check the deposit date in Where's My Refund.
2. Contact your bank, and the bank that received the deposit if you know it, and explain the error.
3. If 5 calendar days pass after you contact the bank and the money has not arrived, file Form 3911 to start a refund trace.
4. Expect the trace to take time: the IRS says banks have up to 90 days from the initial trace to respond, and resolution can take up to 120 days.

If the funds are gone or the bank refuses to return them, the IRS says the matter can become a civil dispute between you and the bank or account owner. The IRS also says it assumes no responsibility for tax preparer or taxpayer error, which is why checking the numbers before you file matters so much.

Why does my return show a bank account I don't recognize?

Often because you chose to pay the software fee out of your refund. With a refund anticipation loan or check, the IRS says the refund goes to a financial institution set up by your software provider or preparer, even if you did not ask for direct deposit, and that you should contact the provider or that institution about problems.

Intuit says that if you chose Federal Fast Deposit, Refund Advance or Pay with My Refund and your own account turns out to be closed or inactive, you will receive a check from one of its partner banks. In these cases the account on your return can belong to that institution, which is not a mistake.

How do you avoid a wrong routing number next time?

• Confirm the routing and account numbers with your bank before you sign, as the IRS advises, rather than typing them from memory.
• Use an account in your own name, your spouse's name or both; the IRS says you should not request a deposit into an account that is not in your own name.
• Remember that no more than three electronic refunds can go into one account or prepaid card; beyond that the IRS sends a notice and a paper refund.
• Retype the numbers on any confirmation screen instead of pasting them, and compare them with the printed copy of the return before you transmit.

If the return came back rejected for another reason, this is your chance to fix the bank details at the same time; the steps are in how to resubmit a rejected tax return. If your screen froze while sending and you are not sure the return went out at all, check first with TurboTax stuck on transmitting.