How You Can Change the Banks Account Where You Receive Your Tax Refund

Adam Rust

To the single mom of three children who just called me in a panic: If you take the right steps today, you may be able to access your tax refund in a few days. But first, you need to get a bank account with a virtual debit card.

You applied for a prepaid debit card when you filed your taxes. You didn’t have a bank account until the day you filed your return. You signed up on that day because you wanted to get your refund as soon as possible. The preparer told you rightly that you can receive the proceeds of your tax refund sooner if you elect to receive it by direct deposit.

You gave your bank details (bank routing and personal account number) to the preparer who dutifully entered them on your tax filing.

However, two weeks have passed, and you still don’t have your card. You believe you may have entered the wrong zip code on your application. You cannot be certain, but your card still hasn’t arrived, and you have three mouths to feed.

I hear the emotion in your voice – I have the feeling you are crying.

The problem you face is that the refund may be delivered to an account associated with a card that you have not received. At this point, it’s already been ten days, but if the Postal Service returns the card to your card issuer, you may have to wait for ten or even fifteen more business days. The end of the month is near, rent is due, and you need your money.

The card company’s customer service phone system doesn’t recognize her because she never activated the card account. That’s the catch-22: she can’t activate the card until it comes in the mail.

I did some research, and there is hope.

First, you need to get a new bank account. Ideally, you need to get a new account that provides you with your routing and account number immediately on signup. As well, you need an account that comes with a virtual card.

While it isn’t the norm that a bank will give you both numbers as soon as your account is approved, there are some that will do it. Getting a virtual card is much harder – only a few card issuers are currently offering this product.

A virtual card has a routing and account number as well as a traditional 16-digit card network number. You are familiar with the 16-digit number; it is the one that appears on the front of a plastic debit card.

Your virtual card is an image displayed inside your new bank account app on your smartphone.

May We Suggest These Accounts?
Picture of card
lost debit card to receive tax refund by direct deposit

Because it is branded under one of the card networks, it can be used for transactions. It will work seamlessly for card-not-present transactions (online, on the phone, etc.). It will work in person if your retailer is willing to accept the card. You will probably find it easiest to integrate your virtual card into a service like Samsung Pay or Masterpass. The image will include the expiration date and the three-digit CVV number.

Once you have that account, you need to contact the IRS. Ask them to cancel your direct deposit. If they have already made the payment, they will have to reverse it. If they have not yet made the payment, all they will have to do is enter your new numbers.

You may not be able to access your refund immediately. The IRS distributes refunds in batches and only on certain days of the week. However, you should have your money no later than the next Friday.

Good luck!

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Adam Rust has worked to defend consumers against harmful financial practices since 2005. He has written extensively about overdraft fees, payday lending, credit insurance, student loans, prepaid debit cards, high-cost installment loans, and subprime mortgage lending. The New York Times interviewed him when it reported on the CFPB's rulemaking on prepaid debit cards; subsequently, his research paper framed the debate on consumer protections.

He serves on the Board of the US Faster Payments Council. He is Director of Research at Reinvestment Partners in Durham, North Carolina. He is the author of BankTalk. He is the author of "This is My Home: Challenges and Opportunities of Manufactured Housing" and has testified to Congress on how to redress some of the problems with manufactured housing. See more on his LinkedIn profile.