8888 - Direct Deposit and Savings Bond Purchases

How do I arrange for direct deposit of a taxpayer's refund? Can they purchase bonds with their refund? 
Form 8888 allows taxpayers to directly deposit their tax refund in up to three different bank accounts. This option is available for tax returns filed either on paper or electronically. Taxpayers can use the direct deposit line on Form 1040 to electronically send their refunds to one or more checking or savings account. Use the DD, Direct Deposit/Form 8888 screen to enter information about the various bank accounts for the refund.

When the DD screen is completed with multiple accounts and a return with a refund is calculated, Form 8888 is generated showing the account number, bank routing number, amount to be deposited into each account and the total refund amount. According to Publication 1345, "Providers must never charge a separate fee for Direct Deposit."

Note: If you want your state refund Direct Deposited as well, you will need to select the appropriate state in the dropdown below the Federal dropdown. To deposit multiple states into one account, select A from the state dropdown.

Savings Bond Purchase

If the taxpayer wishes to purchase savings bonds with their tax refund, this can be done by going to the DD screen and clicking the blue link at the top of the screen that says U.S. Savings Bond Purchases. Complete the screen by entering the bond amount to be purchased, up to the amount of the refund (rounded down to the nearest $50) or $5,000. You should complete the DD screen to allow any remaining refund to be directly deposited, or check the box to receive the remainder via paper-check. A bond can be purchased for someone else by completing that section of the bond page, however, the total amount of bonds purchased cannot exceed $5,000. Review Form 8888 in view mode to ensure that the refund is being processed as needed.

Rejection of direct deposit

The instructions for Form 1040 provide this caution:

"If any of the following apply, your direct deposit request will be rejected and a check will be sent instead.

• You are asking to have a joint refund deposited to an individual account, and your financial institution(s) won't allow this. The IRS isn't responsible if a financial institution rejects a direct deposit.
• The name on your account doesn't match the name on the refund, and your financial institution(s) won't allow a refund to be deposited unless the name on the refund matches the name on the account.
• Three direct deposits of tax refunds already have been made to the same account or prepaid debit card.
• You haven't given a valid account number.
• Any numbers or letters on lines 35b through 35d are crossed out or whited out."

Restrictions on the deposit accounts

The form instructions also include a description of how a refund is allocated to multiple direct deposit accounts if the refund is larger or smaller than anticipated when the return was filed. Note that in some cases, where an account is subject to contribution limits, such as an IRA, HSA, Archer MSA, or Coverdell ESA, or the deposit was deducted as a contribution to a tax-favored account on the tax return, you may need to correct the contribution or file an amended return. See “Changes in Refund Due to Math Errors or Refund Offsets” in the Form 8888 instructions.

Can I delete the Xs in the refund section of Form 1040? 

The IRS requires that the Xs be inserted in the Routing Number and Account Number fields at the bottom of Form 1040 as placeholders when there is no direct deposit information keyed on the return. There is no way to delete them.

Direct Deposit Limitations

As of January of 2015, the IRS has implemented regulations on bank accounts in which refunds may be direct deposited. The IRS now limits a single bank account or pre-paid card to 3 deposits. The fourth deposit (and any subsequent transactions) would be sent as a paper check to the mailing address listed on the tax return. 

In addition, the refund will only be deposited into an account that is in the name of the taxpayer (or spouse) that is receiving the refund. This limitation may affect some taxpayers, such as families in which the parent’s and children’s refunds are deposited into a family-held bank account.

For more information on IRS direct deposit limitations, please see Direct Deposit Limits from the IRS website.


  • A taxpayer should not request a deposit of a refund to an account that is not in his or her name (such as the tax preparer’s own account). 

  • A money card may be used if the routing number and account number are available and the card provider accepts ACH deposits. If the taxpayer is not sure whether or not the card provider accepts ACH deposits, there is generally a number on the back of the card to call to ask.

  • See Publication 1345 for additional guidelines and restrictions.  

  • Drake Software partners with several banks to facilitate having preparer fees withheld from the refund. See Related Links below.