Direct deposit refund adjustments Public Service Bulletin

June 27, 2018

Purpose of bulletin

To announce a change in the Direct Deposit of Refund process.

Background

Prior to July 2018, if FTB made an adjustment to a taxpayer’s refund, the taxpayer would receive a paper check.

Beginning July 2018, in most cases, if there is a change made to a taxpayer’s refund, the taxpayer will still receive their refund via direct deposit.

The taxpayer will receive a notice, by mail, explaining why their tax return was changed.

If the taxpayer requested the refund be deposited into two separate accounts, FTB will adjust the deposit using the rule described below.

  • If the adjustment results in a larger refund, FTB will add the difference into the second account.
  • Increased refund amounts to specific account types may need taxpayer’s attention.
    • If the refund was deposited to an account that has a contribution limit, taxpayer may need to arrange to withdraw the excess contributions.
    • If the refund was deducted as a contribution to a tax-favored account (such as an IRA or 401K) on a tax return, taxpayer may need to file an amended return.
  • If the adjustment results in a smaller refund, FTB will deduct the difference from the second account. If the difference exceeds the amount requested for the second account, FTB will deduct the remainder from the first account.

Questions/Comments

Go to ftb.ca.gov and search for direct deposit requests.