What a TurboTax refund advance is and how it works

A refund advance is a short-term loan that TurboTax offers through a partner bank. The bank lends you money based on your expected tax refund, and you repay the loan when your refund arrives from the IRS. You do not have to wait weeks for the IRS to process your return — you can get cash in your account within one to two business days instead.

The loan is not free. TurboTax charges a fee for the advance, usually between $0 and $89 depending on which tax product you use and which advance option you choose. The bank also charges interest on the borrowed amount. When your refund arrives, the IRS sends it directly to the bank, which takes back the loan amount plus fees and interest, then deposits what remains into your account.

This is different from a refund anticipation loan (RAL), which was a similar product that became less common after 2010. The mechanics are similar, but the terminology and the banks involved have changed.

Key Takeaways

  • TurboTax refund advances are loans from a partner bank that you repay when your tax refund arrives, not information programs.
  • The total cost includes both a TurboTax fee and interest charged by the bank, which varies based on the advance amount and your credit situation.
  • You must complete your tax return and have an estimated refund amount before you can request an advance.
  • The money typically reaches your bank account within one to two business days if you choose direct deposit.
  • You can only use a refund advance if you owe no other debts to the IRS and your refund is not being offset for child support, student loans, or other obligations.

Steps to request a refund advance through TurboTax

After you finish entering your tax information and TurboTax calculates your refund amount, you will see an option to get a refund advance. This usually appears on the screen that shows your refund total. Click on the refund advance offer to see the terms, the fee, and the interest rate the bank is offering you.

TurboTax will ask you to choose a bank account where you want the advance deposited. You will need your routing number and account number, which you can find on a check or by logging into your bank's website. The bank will verify that the account exists and is in your name.

Once you agree to the terms and provide your bank details, the bank will review your information. This review usually takes a few minutes to a few hours. If approved, the money will be deposited into your account within one to two business days. If the bank declines you, TurboTax will tell you why and you can still file your return normally and wait for your refund from the IRS.

What the advance costs and how repayment works

The cost of a refund advance has two parts: the TurboTax fee and the bank's interest. The TurboTax fee depends on which version of TurboTax you used — Free Edition, Deluxe, Premier, or Self-Employed. Free Edition users typically pay $0 to $39, while users of paid versions may pay up to $89. This fee is set by TurboTax and does not change based on your refund amount.

The bank's interest rate varies. It depends on the size of your advance, how quickly you want the money, and your credit history. The bank will show you the exact interest amount before you agree to the loan. For example, if you borrow $1,000 and the interest is $30, you will owe $1,030 total.

Repayment is automatic. When the IRS processes your return and sends your refund, it goes directly to the bank's account, not to you. The bank takes out the loan amount plus all fees and interest, then sends the remaining balance to your bank account. You do not have to do anything — the bank handles the repayment.

Who cannot get a refund advance

The bank will decline your request if your refund is being offset. This means the IRS is withholding your refund to pay a debt you owe. Common reasons for offset include unpaid child support, defaulted student loans, unpaid taxes from previous years, or debts owed to a state agency. If you know your refund will be offset, the bank will not lend you money against it because they cannot may provide they will be repaid.

You also cannot get an advance if you have an outstanding balance with the IRS from a previous year or if you are in an active payment plan with the IRS. The bank considers these signs that your refund may be at risk.

Some people are turned down because the bank's credit review shows they are too high-risk to lend to. If this happens, you can still file your tax return and receive your refund directly from the IRS, which takes three to five weeks.

Comparing refund advances to other ways to get money faster

A refund advance is one option, but not the only one. If you need money before your refund arrives, you could also ask your employer for an advance on your paycheck, borrow from a friend or family member, or use a credit card if you have one. These options may cost less than a refund advance, depending on the interest rates involved.

You could also straightforward wait for your refund. If you file electronically and choose direct deposit, the IRS will send your refund within three to five weeks. If you file by mail, it takes longer — usually six to eight weeks. For many people, waiting is free and costs nothing.

A refund advance makes sense if you need the money urgently and the cost is worth it to you. It does not make sense if you can wait a few weeks or if the total fees and interest are more than you can afford to lose from your refund.

What happens if the IRS delays your refund

If the IRS takes longer than expected to process your return, you still owe the bank the full loan amount plus fees and interest on the date you agreed to. The bank does not wait for the IRS. You will need to repay the loan from your own funds if the refund is delayed.

This is rare, but it can happen if the IRS flags your return for review, if you made a mistake on your return that requires correction, or if there is a backlog at the IRS. Before you agree to a refund advance, make sure your return is accurate and complete. Double-check your Social Security number, your income figures, and your bank account information.

Frequently Asked Questions

Can I get a refund advance if I file my taxes late?

Yes, you can request an advance at any time during the tax year, as long as you have completed your return and TurboTax has calculated your refund. However, if you file very late in the year, the IRS may take longer to process your return, which could delay the bank's repayment and create a problem for you.

What if I owe money on my taxes instead of getting a refund?

You cannot get a refund advance if you owe taxes. The advance is only available when TurboTax calculates that you will receive a refund. If you owe, you will need to pay the IRS directly.

Does getting a refund advance hurt my credit score?

The bank will do a credit check, which may show up on your credit report. However, a refund advance is a short-term loan that you repay within weeks, so the impact on your credit is usually small. The bigger risk is if you fail to repay and the bank reports it as a default.

Can I cancel a refund advance after I request it?

Yes, you can usually cancel within a certain window — often 24 hours — after you request the advance. Contact TurboTax or the partner bank right away if you change your mind. Once the money is deposited into your account, cancellation becomes more complicated and may not be possible.

What if TurboTax made a mistake on my return and my refund is smaller than expected?

You still owe the bank the full loan amount plus fees and interest, even if your actual refund is smaller. This is why it is important to review your return carefully before requesting an advance. If you discover an error after you have received the advance, you may need to repay the bank from your own funds.