14502: State Refunds and Bank Products

Yes, most of our bank partners support a bank product where there is either a small federal refund or a zero federal refund (or balance due) as long as the state refund is sufficient to cover all of the bank and preparer fees and the federal and state returns are transmitted together. This is sometimes called a "state only" bank product, however, the federal and state returns must still be transmitted together for the bank product to be eligible. Note 531 generates explaining this situation on applicable returns: 

TAX RETURN ELIGIBLE FOR E-FILE: The federal tax refund on this return is not enough to cover the preparer fees and bank fees, thus making the return ineligible for e-file, but the state tax refund combined with the federal refund is adequate to cover the fees.

This return can be e-filed as long as the state return is transmitted with the federal.

A bank product of this type is only allowed when:

• the state refund(s) are enough to cover any and all fees, and
• the bank product selected is Refund Transfer (RT). 

A "state only" product cannot be processed when selecting an Advance product (with or without RT) or when processing the refund to a Prepaid Card. 

See the Bank Product Information sheet (EPS_INFO, RA_INFO, TPG_INFO, RF_INFO, RB_INFO) to review the summary of fees. When the bank processes the refunds, the fees will be taken out as follows: 

*If the state refund is processed before the federal refund, all fees will be taken out of the state refund, and the remainder of the state refund will be disbursed. When the federal refund is received by the bank, it will be disbursed through the chosen disbursement method.