Turbo Tax Sent Me a Check Instead of Direct Deposit - All Checks Have Same Number (100001)

I had the EXACT same issue on March 15th. Filed through TurboTax, selected direct deposit, but got a paper check with that 100001 check number. My credit union put a 10-day hold on it because they said it looked suspicious. I called TurboTax customer service three times and got disconnected twice before someone finally admitted this is happening to "a small percentage" of customers. Yeah right. I'm never using them again after 8 years as a customer.

This is why I switched to FreeTaxUSA last year. TurboTax kept trying to upsell me on everything and I was paying $89+ for a simple return. FreeTaxUSA was completely free for federal and only $15 for state. No hidden fees, no refund advances, no check nonsense. Direct deposit came exactly when they said it would.

Dealing with TurboTax customer service is like trying to climb a mountain of Jell-O - exhausting and you never make progress. After my similar experience (check instead of DD), I spent 3 hours trying to get answers. Finally gave up and called the IRS directly using Claimyr (https://youtu.be/_kiP6q8DX5c). Got through to an agent in about 15 minutes who explained this is a known issue with certain tax prep companies. They were able to document the situation in my file which might help if there are any issues with the check clearing. Worth the service fee just to avoid the endless hold music!

According to IRS Publication 1345 (Authorized e-File Providers), tax preparation companies are required to honor the taxpayer's selected disbursement method unless there are specific compliance issues. I experienced this same problem last year and filed a complaint with both the IRS and CFPB. The bank hold is particularly frustrating because Regulation CC (Expedited Funds Availability Act) typically allows banks to place longer holds on unusual checks. I eventually got my money, but it took 14 days longer than expected.

This is a known issue with TurboTax's Refund Processing System (RPS) integration with their banking partner. The root cause is their migration to a new payment processor that uses a standardized check sequence for tax refund disbursements. I was able to bypass this by selecting the "Pay with Refund" option but then manually entering my direct deposit information in the tax return itself rather than letting TurboTax handle the disbursement. This ensures your refund comes directly from the IRS Treasury, not through TurboTax's third-party processor.

I've been helping people with tax issues for about 8 years now, and unfortunately, this TurboTax check problem seems to be happening to quite a few people this year. In my experience, the fastest solution is probably to deposit the check at your primary bank (not a check cashing place), and perhaps talk to a manager about reducing the hold time since it's a tax refund check. It might also be worth considering that sometimes these problems occur when there's a mismatch between the name on your tax return and the name on your bank account, which can cause direct deposits to be rejected and converted to checks. Just something to possibly check for next year.