Rules on Cashing Income Tax Checks at Banks

Knowing the rules means less time at the teller window.

Knowing the rules means less time at the teller window.

The IRS would prefer that those receiving income tax refunds obtain them electronically, since that reduces the risk of fraud. However, if you have a bank account, your bank should cash an income tax check without charging you for the privilege. Keep in mind that banks with which you do not have an account have no obligation to cash a tax refund check.

IRS Refund Check Cashing Rules

The IRS doesn’t specify exactly how you can cash a tax refund check. It does point out that paper checks are currently issued only when direct deposit is unavailable, and that issuance of a paper check may result in refund delays of up to 10 weeks. It does list qualifying institutions permitted to accept direct deposit income tax refund checks, including national and state banks, credit unions, savings and loan associations and mutual savings banks.

If There Is No Bank Account

What do you do if you don’t have a bank account or account at a similar financial institution so you can cash an income tax check? Some national banks may cash a tax refund check for a person who is not a customer. However, the policy of such banks may vary depending on the branch and bank manager. Visit the local branch of such banks or look on their websites to see if they offer this service. If you find a bank that allows someone who is not a customer to cash an income tax check, you’ll need to bring along two to three forms of identification, such as your driver’s license, Social Security card and credit card. At least one form of ID should include your photo. Expect to pay a fee when you cash a tax refund check at a bank at which you are not a customer, although the bank may waive the fee if you open an account with your refund check. Banks may also impose a limit on the amount they will cash.

Other Options to Cash a Tax Refund Check

Rather than cashing a tax refund check at a bank, consider other options like retail stores. Supermarkets such as Kroger offer check cashing, as does Walmart and many other major retailers. Policies vary depending on the retailer, but you will pay a fee. For example, the Walmart check cashing policy in Texas and elsewhere in the U.S. imposes a $4 fee on all transactions up to $1,000 and $8 for transactions above that amount. Most of the year the limit on check cashing is $5,000, but from January to April during prime tax refund season the limit rises to $7,500.

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About the Author

A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including PocketSense, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.

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