Provision- The Split Tax Refund
Additional Helpful Information
- If the refund is intended to be a contribution for the previous year, it must be credited to the IRA by April 15. If the deposit is credited to the IRA after April 15, it cannot be treated as a contribution for the previous year ( Unless April 15 falls on a weekend or public holiday which is a non-business day, in which case the deadline is extended from April 15 to the next business day).
- The taxpayer should ensure that the IRA is opened before the refund is deposited with the financial institution.
- If the financial institution is unable to process the deposit (or reject the deposit for any reason), the IRS will send the taxpayer a check for the amount.
- If a taxpayer completes Form 8888, all of the refund amount must be credited to accounts as direct deposits. None of the amount can be sent to the taxpayer as a check.
- The account to which the direct deposit is being made must be an account for which the registration includes the taxpayer’s name.