A split refund allows a taxpayer to divide their tax refund into multiple parts and direct deposit these funds into up to three different accounts at U.S. financial institutions. This can include checking or savings accounts, reloadable prepaid debit cards, or mobile apps. Additionally, taxpayers can use part or all of their refund (up to $5,000) to purchase U.S. Series I Savings Bonds for themselves or someone else.
To request a split refund, taxpayers must complete and attach Form 8888, Allocation of Refund (Including Savings Bond Purchases), to their federal income tax return. This form allows them to specify the amounts and the accounts where the refund should be deposited. The accounts must be in the taxpayer's name and can include various types of accounts such as individual retirement arrangements (IRAs), health savings accounts (HSAs), Archer MSAs, Coverdell education savings accounts (ESAs), or Treasury Direct online accounts.
Taxpayers can also choose to split their refund between direct deposit and a paper check. The split can be made in any combination of up to seven ways, including three direct deposits, three Series I savings bonds, and one paper check.
The benefits of splitting a refund include the convenience of directing funds to different accounts for various purposes, such as immediate needs and future savings, and the speed and safety of direct deposit, which provides faster access to the refund compared to receiving a paper check.
Sources:
Publication 17 (2023)
Publication 1345 (11/2023)
