Can I Deposit My Paper Tax Refund Check in My Relative's Bank Account?

by Michael Marz
You have a number of options for obtaining your tax refund.

If you don't have a bank account in which to deposit your paper tax refund check, your relative's bank may let you deposit it into his account. But if your goal is to get your tax refund money as quickly as possible, other deposit and check-cashing options are available. These alternative options, however, may require the payment of various fees that ultimately come out of your tax refund.

Endorsing Your Tax Refund Check

Once you receive your tax refund check, you'll need to endorse it before giving it to your relative or depositing it directly into his bank account. An endorsement -- which is made by signing your name on the back of the check -- allows another person to cash or deposit a check that's made out to you. Losing an endorsed check presents some risk, as it's possible for the person who finds it to deposit it into her own account. For this reason, you may want to consider making a special endorsement so that only your relative can deposit it. To make a special endorsement, you still sign your name on the back of the check. Below your signature, you then add a “Pay to the order of” notation followed by your relative's full name.

Check-Cashing Services

It generally takes a few business days for your tax refund check to clear in your relative's account, though it may be longer depending on the bank's policy. As an alternative, you can take the paper check to a retail or grocery store, such as Wal-Mart and Kroger, that offers instant check-cashing services for a flat fee. If you can't locate a retail or grocery store in your area that accepts tax refund checks, you may want to consider a smaller establishment that specializes in check-cashing, money order and bill payment services, though the fee may be a percentage of your refund.

Direct Deposit Options

You can access your tax refund much sooner if you have it direct-deposited. The Internal Revenue Service advises against having your tax refund deposited into your relative's account or any other account that isn't in your name. But you don't need a traditional bank account to take advantage of direct deposit. Many of the prepaid debit cards on the market can provide you with an account and routing number -- which is linked to your card -- so you can receive direct deposits. Prepaid debit cards charge customers a number of fees for various transactions.

Tracking Your Refund Check

Whether you're waiting for a paper check to arrive or wondering when the IRS will make the direct deposit, you can always check the status of your tax refund using the “Where's My Refund” tool on the IRS website. After you enter a few pieces of personal information, the tool generates a status update that should tell you when the refund was sent or that your tax return has not been processed.

About the Author

Michael Marz has worked in the financial sector since 2002, specializing in wealth and estate planning. After spending six years working for a large investment bank and an accounting firm, Marz is now self-employed as a consultant, focusing on complex estate and gift tax compliance and planning.

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