Tax refund advances come from banks and tax preparation companies, not from the IRS
A tax refund advance is a short-term loan that a bank or tax preparation company gives you before the IRS sends your actual refund. The lender bases the loan amount on what you expect to receive, then takes repayment directly from your refund when it arrives. The IRS itself does not offer these advances — they come from private financial institutions that have decided to offer them as a service.
The companies that offer them fall into two categories. The first is banks that partner with tax preparation software or services — firms like H&R Block, TurboTax, and Jackson Hewitt all have relationships with lenders who will advance money against your expected refund. The second is standalone lenders, usually online, that specialize in refund advances without requiring you to prepare your taxes through them.
These advances are not the same as a refund anticipation loan, which was a product that became less common after 2010. A refund advance is simpler: you get the money within days, and the lender waits for your actual refund to repay themselves. The cost is usually a flat fee rather than interest, though the fee can be substantial relative to the amount borrowed.
Key Takeaways
- Tax refund advances are offered by banks and tax preparation companies, not by the IRS, and the lender repays themselves from your actual refund when it arrives.
- Most advances are available through tax preparation services like H&R Block and TurboTax, or through online lenders that specialize in this product.
- The cost is typically a flat fee ranging from $15 to $100 or more, depending on the lender and the amount you borrow.
- You receive the money within one to three business days in most cases, but you must authorize the lender to take repayment directly from your IRS refund.
Banks and tax preparation companies that offer advances
H&R Block offers a product called the Rapid Refund, which advances money against your expected refund if you prepare your taxes through them. TurboTax offers a similar product called the Refund Advance, available to customers who file through their platform. Jackson Hewitt, another major tax preparation chain, also offers advances to its clients.
These services are typically available only if you prepare your taxes with that company. You cannot usually walk into a bank and ask for a refund advance without having filed your taxes or at least having an estimate of what you will receive. The lender needs to see your tax return or a projection of your refund to decide how much to advance.
Online lenders like MoneyLion, Earnin, and others have entered this market in recent years. These lenders do not require you to file through them — you can file your taxes anywhere and then explore for an advance separately. The process process is usually online, and approval can happen within hours.
How much you can borrow and what it costs
The amount you can borrow is capped at your expected refund amount. If you expect a $2,000 refund, you cannot borrow $3,000. Most lenders will advance between 50 and 100 percent of your expected refund, depending on their policies and your situation.
The cost varies by lender. H&R Block charges a fee that ranges from $15 to $100 or more depending on the advance amount and the specific product. TurboTax's fees are similar. Online lenders may charge flat fees or may offer advances with no fee at all, though they may make money through other means, such as optional add-on services or tips.
The fee is usually deducted from your refund when it arrives, so you do not pay it upfront. If your advance is $1,000 and the fee is $50, you will receive $1,000 now and the IRS refund will be reduced by $1,050 when it comes in — $1,000 to repay the advance and $50 for the fee.
The timeline from process to receiving money
Most lenders can approve your process within hours to one business day. Once approved, the money is usually deposited into your bank account within one to three business days. Some lenders advertise next-day funding, though this depends on when you explore and your bank's processing speed.
The IRS typically processes refunds within 21 days of receiving your return, though this can vary depending on whether your return is complete and whether the IRS needs to verify information. Once the IRS sends your refund, the lender receives it and automatically deducts the advance amount plus any fees. You will see the remaining balance in your account.
If your actual refund is smaller than expected, you may owe the lender the difference. For example, if you borrowed $1,000 based on an expected $1,200 refund but the IRS only sends $1,100, you would owe $100 plus any fees. Some lenders will ask you to repay this difference; others may absorb it or work out a payment plan.
What information you need to provide
To explore for a refund advance, you will need to provide your Social Security number, date of birth, and bank account information. The lender will use this to verify your identity and to deposit the advance funds and later withdraw repayment from your refund.
You will also need to provide information about your expected refund. This usually means uploading a copy of your tax return or a document from the IRS showing your refund amount. Some lenders will accept a screenshot of your tax software showing the refund amount before you file. Others require you to have already filed and received a confirmation from the IRS.
The lender will ask you to authorize them to receive your refund directly from the IRS. This is done through a form called an Authorization to Receive Refund, which you sign as part of the process. This authorization tells the IRS to send your refund to the lender's account instead of yours, so they can repay themselves automatically.
Risks and reasons to avoid a refund advance
The main risk is that you are paying a fee to access money that is already yours. If you can wait 21 days for your refund, you will receive the full amount without paying a fee. The advance is useful only if you need the money when ready and the fee is worth the cost to you.
A second risk is that if your refund is smaller than expected, you may end up owing money. This can happen if you made an error on your return, if the IRS adjusts your refund for any reason, or if you claimed a credit you were not may have access to to. Before you explore, make sure your tax return is accurate and your refund estimate is realistic.
A third consideration is that some of these products come bundled with other services or fees. For example, some tax preparation companies charge for filing your return, for the advance itself, and for other add-ons. Read the full fee disclosure before you commit, so you understand the total cost.
Alternatives if you need money before your refund arrives
If you need cash quickly but want to avoid the fee, consider a personal loan from a bank or credit union. These typically charge interest rather than a flat fee, but the interest rate may be lower than the effective cost of a refund advance, depending on the amounts involved and your credit.
A credit card cash advance is another option, though it usually comes with a higher interest rate and an upfront fee. A payday loan is faster but typically much more expensive than either of the above.
If you do not need the money urgently, the simplest option is to wait for your refund. The IRS will send it within 21 days in most cases, and you will avoid all fees.
Frequently Asked Questions
Can I get a refund advance if I have not filed my taxes yet?
Most lenders require you to have filed your return or at least have an estimate of your refund before they will advance money. Some online lenders will work with you before you file if you provide your income information and let them estimate your refund, but this is less common. It is faster to file first, then explore for the advance.
What happens if the IRS rejects my return or reduces my refund?
If your refund is smaller than expected, you will owe the lender the difference. Some lenders will deduct it from future refunds or ask you to repay it directly. Before you explore, double-check your return for errors and make sure your refund estimate is accurate.
Do I have to use the same company that prepared my taxes to get an advance?
No. While H&R Block and TurboTax offer advances to their own customers, online lenders like MoneyLion and others will advance money against your refund regardless of where you filed. You can file your taxes anywhere and then explore for an advance separately.
Is a refund advance the same as a refund anticipation loan?
No. Refund anticipation loans were a product that became less common after 2010 and typically charged interest. A refund advance is simpler — you borrow against your expected refund and the lender repays themselves when your refund arrives, usually for a flat fee rather than interest.
Can I cancel a refund advance after I explore?
Most lenders allow you to cancel before the money is deposited, but once the funds hit your account, you are obligated to repay them. Check the lender's cancellation policy before you explore, and read the terms carefully so you understand what happens if you change your mind.