TurboTax does not offer a refund advance or loan directly, but it partners with third-party lenders who do
TurboTax itself does not lend money or advance your tax refund. However, when you file through TurboTax, you may see an offer for a refund advance — a short-term loan from a separate company that pays you before the IRS sends your refund. This is not a TurboTax product. It is a loan from a partner lender, and you pay interest or fees to use it.
The lender pays the money into your bank account within one to three business days, then collects repayment directly from your tax refund when it arrives from the IRS. You do not have to take the advance — it is optional. If you decline, you file normally and wait for the IRS to deposit your refund, which typically takes 21 days or longer.
The cost of a refund advance varies by lender and by the size of your refund. Some lenders charge a flat fee (for example, $15 to $50), while others charge a percentage of the advance. A few lenders offer the advance with no fee if you meet certain conditions, such as using direct deposit or filing a certain tax form.
Key Takeaways
- TurboTax partners with third-party lenders to offer refund advances, but does not provide the loan itself.
- A refund advance is a short-term loan that deposits into your bank account within one to three business days, then repays itself from your IRS refund.
- You pay interest or a fee to the lender for the advance, and the cost depends on the lender and the size of your refund.
- Accepting a refund advance is optional — you can decline the offer and wait for the IRS to send your refund directly.
- The lender collects repayment automatically from your tax refund, so you do not have to make a separate payment.
How a refund advance works in practice
When you reach the end of filing your taxes in TurboTax, the software may display an offer to borrow against your expected refund. If you accept, you choose a lender from the options shown and agree to their terms. The lender then verifies your refund amount with the IRS (this happens electronically and does not delay your filing).
Once approved, the lender deposits the advance into the bank account you provide — usually within one to three business days. You now have the money in hand. When your actual tax refund arrives from the IRS, the lender automatically deducts what you borrowed plus the fee or interest, and sends you the remainder.
For example: you file your taxes and TurboTax estimates your refund at $2,000. You take a refund advance with a $30 fee. The lender sends you $1,970 within two business days. Three weeks later, the IRS deposits your $2,000 refund. The lender takes $2,000 from that deposit, keeps the $30 fee, and you receive nothing further — the advance has been repaid.
When a refund advance makes sense
A refund advance is useful if you need money before the IRS processes your return. The IRS typically deposits refunds within 21 days of accepting your return, but processing can take longer if there are errors, if you claim certain credits, or if the IRS needs to verify information. If you cannot wait that long, the advance gets you the money in days instead of weeks.
The cost is worth it only if the fee is small relative to the benefit of having the money sooner. If your refund is $500 and the fee is $40, you are paying 8 percent to get the money three weeks early. If your refund is $3,000 and the fee is $15, you are paying 0.5 percent. The larger your refund, the smaller the percentage cost becomes.
A refund advance is not useful if you can wait for the IRS to send your refund. Since the advance is a loan, you pay to use it. If time is not a factor, skipping the advance saves you money.
Fees and costs vary by lender and refund size
TurboTax does not set the price of a refund advance. Each lender partner sets its own fees. When you are offered an advance during filing, TurboTax shows you the lender options and the cost for each one, based on your estimated refund amount.
Some lenders charge a flat fee regardless of refund size — for instance, $15 or $25. Others charge a percentage of the advance, such as 1 to 3 percent. A few lenders offer zero-fee advances if you meet conditions like using direct deposit or filing a specific tax form (such as Form 1040-EZ, though this form is no longer used by the IRS).
Before you accept an advance, compare the cost across the lenders TurboTax shows you. The difference between a $15 fee and a $50 fee is significant, and you have the choice. If none of the offers feel worth the cost, you can decline and file without an advance.
What happens if the IRS delays your refund
If the IRS takes longer than expected to process your return, the lender still repays itself from your refund when it arrives — there is no additional cost to you for the delay. The lender assumes the risk that the IRS will eventually send the refund.
However, if the IRS rejects your return or reduces your refund due to an error or a discrepancy, the lender may contact you to collect the shortfall. For example, if you took a $2,000 advance but the IRS only sends a $1,500 refund, the lender may ask you to pay the $500 difference. Read the lender's terms carefully to understand what happens in this scenario.
In rare cases, if the IRS denies your refund entirely (for instance, because of unpaid taxes or student loan debt), the lender will pursue collection. This is why it is important to be confident in your refund amount before taking an advance.
Alternatives to a refund advance
If you need money before your refund arrives, you have other options besides a refund advance. A personal loan from a bank or credit union may have a lower interest rate, especially if you have good credit. A credit card cash advance is another option, though it typically costs more than a personal loan.
Some employers offer paycheck advances or emergency loans to employees. If you are in financial hardship, local nonprofits or community organizations may offer short-term information. These routes do not depend on your tax refund and may cost less than a refund advance.
The simplest alternative is to wait for the IRS to send your refund. If you can manage without the money for three to four weeks, you avoid the fee entirely and keep the full refund amount.
How to decline a refund advance offer
When TurboTax shows you refund advance options during filing, you do not have to choose one. You can skip past that screen and continue to file your return normally. Your taxes will be filed the same way — the only difference is that you will wait for the IRS to deposit your refund instead of borrowing against it.
If you are unsure whether to take an advance, decline it during filing. You cannot go back and request one after you have filed, so make the decision before you submit your return to the IRS.
Frequently Asked Questions
Can I get a refund advance if I owe taxes instead of getting a refund?
No. A refund advance is only available if you are owed a refund. If you owe taxes, there is no refund to advance against. You would need to pay the amount owed to the IRS by the important date.
Does taking a refund advance affect my credit score?
It depends on the lender. Some lenders perform a hard credit inquiry, which can temporarily lower your score. Others do not check your credit at all. When TurboTax shows you lender options, ask whether they report to credit bureaus or perform a credit check before you agree.
What if I file an amended return after taking a refund advance?
If you file an amended return (Form 1040-X) and your refund changes, the lender may adjust the repayment. For example, if your refund increases, the lender takes the new amount and sends you the difference. If your refund decreases, you may owe the lender money. Contact the lender when ready if you plan to amend your return.
Can I use a refund advance if I file my taxes outside of TurboTax?
No. The refund advance offer is only available when you file through TurboTax. If you file with another tax software or with a tax preparer, you would need to ask them whether they offer refund advances through their own lender partners.
Is the refund advance the same as a tax refund loan?
Yes, they are the same thing. A refund advance, refund loan, and tax refund anticipation loan all refer to the same product — a short-term loan that repays itself from your tax refund.