What Is TurboTax Refund Advance and How Does It Work?

A tax refund loan is one option to consider if you’re counting on your tax refund to cover an expense and don’t have time to wait for the IRS to process your refund. TurboTax Refund Advance is one such program available to select TurboTax customers who use the software to file their tax returns.

If you qualify, you can receive a portion of your anticipated refund — between $250 and $4,000 — once the IRS accepts your return. Read on to learn how this program works and who qualifies for it.

What Is TurboTax Refund Advance?

TurboTax Refund Advance is a loan secured by your tax return that lets you receive up to half of your expected federal refund after the IRS accepts your return, instead of waiting for the IRS to process it. If you qualify for the program, you can have up to $4,000 deposited in your Credit Karma Money Spend account, typically within 15 minutes of acceptance.

Here’s a look at the maximum loan amount for each anticipated federal refund range:

The TurboTax website notes that several factors will determine the loan amount you can receive, so not all users will be eligible for the maximum refund advance.

How Does TurboTax Refund Advance Work?

To take advantage of TurboTax Refund Advance, you have to use TurboTax software to file your return and select Refund Advance to receive your refund instead of a direct deposit or paper check from the IRS. You’ll also need to open a Credit Karma Money Spend checking account if you don’t already have one that’s in good standing.

Once the IRS accepts your return — usually between 24 and 48 hours after you file your return, but it can take a few hours or weeks — your refund advance should appear in your Credit Karma account. The rest of the refund — minus tax preparation fees — appears in your checking account after the IRS processes your return and distributes the full refund. At this point, the bank receives the money it loaned you, and the loan is paid in full.

The advance you receive is a tax refund loan funded by First Century Bank. This is a fee-free loan with a 0% interest rate that does not affect your credit. Other tax refund loans — like those offered by furniture stores and car dealerships — can be costly, with significant interest rates and processing fees that can greatly reduce the amount of the refund.

How Much Does TurboTax Refund Advance Cost?

There’s no charge to use TurboTax Refund Advance, but you may have to pay to use TurboTax software to complete and file the return. The tax preparation fee ranges from $0 to $359, depending on the types and number of forms you have to file and the services you choose. Individuals who choose a plan that includes live assistance from a tax expert tend to pay more than those who prepare their own returns.

For example, an individual who wants live support from a tax preparation expert may pay a fee of $89 to file with TurboTax software. If that person expects a refund of $3,000 and qualifies for the maximum refund advance for this expected refund amount, they can receive an advance of $1,500. When the IRS issues the full refund, the individual should receive a deposit of $1,411 ($1,500 minus the $89 tax preparation fee).

Who Is Eligible for TurboTax Refund Advance?

Will TurboTax give you an advance? Yes, if you meet the eligibility requirements listed below:

• Be at least 18 years old
• Have a Social Security number
• File taxes using TurboTax software
• File taxes for a living person
• Report income on a Form W-2, Form 1099-R, Schedule C or Schedule C-EZ
• Expect a federal refund of $500 or more
• Use a physical address that matches the address listed on the tax return

TurboTax restricts the types of tax forms you can use, and those who file certain forms, including 1040SS, 1040PR and 1040X, do not qualify. The program is not available to customers living in Connecticut, Illinois, Nebraska or North Carolina or those who use a P.O. Box or prison address as their mailing address. Individuals who have opened and closed a Credit Karma checking account are also ineligible for the program.

The Refund Advance program is available until Feb. 15 or until funding for loans is no longer available.

Is TurboTax Refund Advance Worth It?

If you need cash now and cannot wait to receive your tax refund, TurboTax Refund Advance may be worth it. Jackson Hewitt charges customers a maximum of $30 for a $500 refund advance loan in addition to the tax preparation fee. H&R Block doesn’t charge for a refund advance loan, but it does require customers to file their taxes with a tax pro, which starts at $85.

TurboTax makes its Refund Advance program available to customers who complete their returns on their own as well as those who use expert assistance. If you prefer filing on your own and want an advance on your refund, it may be the better option. You get the convenience of filing online without paying additional fees or interest for the advance deposit.

Of course, if you don’t meet TurboTax’s requirements or prefer using different tax software, there are alternatives to a refund advance loan. The IRS processes paper returns and issues refunds in about six to eight weeks. If you e-file and choose to receive your refund via direct deposit, you can have your refund in your account in less than three weeks.

Information is accurate as of Feb. 14, 2023.

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