If You File Taxes Jointly, Who Gets the Refund?

When married couples file a joint tax return, they combine their finances onto a single Form 1040. This can result in a tax refund if they overpaid taxes during the year. Who is entitled to this money depends on how the refund is issued and whether either spouse has certain outstanding debts.

How the IRS Issues a Joint Refund

The Internal Revenue Service (IRS) sends refunds from a joint return primarily through direct deposit. For this option, you provide bank and routing numbers on your tax return for an electronic transfer. The IRS recommends using an account in both spouses’ names to ensure a smooth transaction.

A financial institution may reject a direct deposit if the bank account is only in one spouse’s name. This can cause delays, as the IRS would then cancel the transfer and mail a paper check instead. This check will be made payable to both spouses, such as “John A. Doe and Jane B. Doe.”

To deposit or cash a jointly issued check, most banks require the endorsement of both individuals. This requirement ensures both parties are aware of the transaction and prevents one spouse from accessing the funds without the other’s consent.

Handling Refunds When One Spouse Owes Debt

A joint tax refund can be intercepted to pay certain past-due debts owed by one or both spouses through the Treasury Offset Program (TOP). This process is managed by the Treasury Department’s Bureau of the Fiscal Service (BFS). The entire refund can be seized to satisfy an obligation, even if only one spouse is legally responsible for the debt.

Debts eligible for the TOP include past-due federal or state income taxes, delinquent child or spousal support, and defaulted federal non-tax debts like student loans. Before an offset occurs, the agency holding the debt must send a notice to the debtor, providing a 60-day window to resolve it. If the debt remains unpaid, the BFS intercepts the refund, deducts an administrative fee, and sends the remainder to the creditor.

A spouse who is not responsible for the debt can recover their portion of the refund by filing Form 8379, Injured Spouse Allocation. To qualify as an “injured spouse,” you must have had your share of the refund applied to your spouse’s debt. You also must have made and reported tax payments or claimed a refundable tax credit.

On Form 8379, you must allocate all income, deductions, and tax payments between both spouses as if you had filed separate returns. This calculation determines the injured spouse’s share of the overpayment. The form can be filed with the original return, with an amended return, or by itself after you receive an offset notice.

Filing the form with your return takes 11 to 14 weeks to process, while filing it separately takes about eight weeks.

Proactively Directing Your Refund

Couples can proactively manage their refund by using Form 8888, Allocation of Refund. This form allows you to split a refund and have it directly deposited into as many as three different accounts. This is useful for spouses who maintain separate finances or want to direct funds for specific purposes.

The form requires the routing and account number for each account, along with the specific dollar amount for each deposit. Each deposit must be at least $1. You can direct funds to several types of accounts, including:

• Checking accounts
• Savings accounts
• IRAs
• Health Savings Accounts (HSAs)

You must verify the account information for accuracy to avoid complications. If the refund amount changes during processing, the IRS may send the entire refund to the first account listed rather than splitting it. This form cannot be used if you are also filing Form 8379 for an injured spouse claim.