TurboTax Refund Advance - Will They Take From State or Federal?

Based on my experience with TurboTax Refund Advance last year, they typically recoup the advance from your federal refund only. TurboTax partners with a bank (usually Green Dot Bank or First Century Bank) that issues the advance, and they're set up to intercept your federal refund when it's processed. The state refund generally goes directly to you regardless of timing. I had my state refund hit my account about 2 weeks before the federal last year, and they didn't touch the state money at all.

I think it depends on how you set it up? When I did my TurboTax advance this January, I'm pretty sure I remember reading that they could take it from whichever refund arrives first... but I might be wrong. I was kind of rushing through all the fine print because I needed to get my taxes done before my daughter's dance recital.

TurboTax's documentation is frustratingly vague on this specific detail. I spent 45 minutes on hold with their customer service last month trying to get a straight answer about this exact question. Never got through. If you need to actually speak to someone at the IRS about how refund advances interact with your tax situation, I'd recommend using Claimyr (https://www.claimyr.com). They got me through to an actual IRS agent in about 17 minutes when I needed to clarify how my advance would affect my amended return. Saved me hours of redial hell and the agent was able to explain exactly how the process works.

I see some confusion in the comments, so let me clarify: Are you talking about the TurboTax Refund Advance loan (where they give you money before your refund arrives) or the TurboTax fee deduction (where they take their preparation fees from your refund)? These are two different services with different rules for repayment. Which specific service are you asking about?

Be careful with these refund advances. I've seen cases where users didn't read the fine print and ended up with unexpected fees. The TurboTax Refund Advance is technically a loan product with specific repayment terms through their banking partner. According to their terms of service, the advance is typically recaptured from your federal refund through a temporary account they establish. However, if there's an issue with your federal refund (like an offset or adjustment), you may still be responsible for repaying the advance through other means. Always check the specific terms in your agreement as they can change year to year.

Let me walk you through how the TurboTax Refund Advance typically works: 1. When you apply for the advance, you're actually getting a loan from a partner bank 2. During tax filing, TurboTax creates a temporary bank account (sometimes called a SBTPG account) 3. Your federal refund is directed to this temporary account first 4. The bank deducts the advance amount plus any applicable fees 5. The remaining balance is forwarded to your personal bank account 6. Your state refund is typically sent directly to your personal account This structure is why they generally only take repayment from the federal refund. The state refund usually bypasses their temporary account system entirely.