If you’re expecting a tax refund from the IRS, you don’t have to deposit the entire amount into a single bank account. The IRS allows taxpayers to split their refund into multiple accounts using Form 8888 – Allocation of Refund (Including Savings Bond Purchases). This feature is ideal for managing your money efficiently—such as saving part of your refund, investing in retirement, or paying down debt. In this blog, we’ll cover everything you need to know about how to use Form 8888 to allocate your refund wisely and accurately.
What Is Form 8888?
Form 8888 is a one-page IRS form that allows taxpayers to split their federal income tax refund into up to three different accounts. These accounts can be checking or savings accounts at financial institutions, retirement accounts, or even U.S. Series I Savings Bonds.
This form is used when filing your Form 1040, 1040-SR, or 1040-NR. Instead of selecting a single direct deposit destination for your refund, Form 8888 lets you allocate specific dollar amounts to multiple accounts for better financial control.
Why Split Your Refund?
There are several reasons you might want to divide your refund between accounts:
- Save part of your refund in a high-yield savings account
- Pay off credit card or loan debt from one account
- Fund an IRA or other retirement account
- Purchase U.S. Series I Savings Bonds for long-term savings
- Budget different portions for short-term and long-term goals
By using Form 8888, you gain flexibility in how you manage your financial goals immediately upon receiving your tax refund.
Who Can Use Form 8888?
Most taxpayers are eligible to use Form 8888, including those filing:
- Form 1040 (U.S. Individual Income Tax Return)
- Form 1040-SR (for seniors)
- Form 1040-NR (for non-resident aliens)
However, if you are filing a joint return, you can use joint or individual accounts for your direct deposits. Just ensure the names on the accounts match one or both filers on the return.
Types of Accounts Eligible for Refund Splitting
The IRS allows you to direct your refund to the following types of accounts:
- Checking accounts
- Savings accounts
- Traditional IRAs or Roth IRAs
- Health Savings Accounts (HSAs)
- Education savings accounts (like 529 plans, if eligible)
- U.S. Series I Savings Bonds (up to $5,000 per taxpayer)
Note: You cannot split your refund among different taxpayers’ accounts, foreign bank accounts, or credit card accounts.
How to Fill Out Form 8888
Form 8888 has three sections—each allowing you to designate a specific amount of your refund and the bank information or bond designation:
Step 1: Determine the Total Refund from Form 1040
Before completing Form 8888, refer to Line 35a of your Form 1040 to see the total refund amount you’re due. The amounts entered on Form 8888 must not exceed this total.
Step 2: Provide Bank Routing and Account Information
For each account, you’ll need:
- The bank’s nine-digit routing number
- Your account number (typically 8 to 17 digits)
- Account type (checking or savings)
- The dollar amount to deposit into that account
Step 3: Allocate Your Refund
You can allocate your refund into:
- Up to three different bank or retirement accounts
- A combination of two accounts and up to $5,000 in savings bonds
For example:
- $1,000 to your checking account
- $2,000 to your savings account
- $2,000 to purchase U.S. Savings Bonds
Step 4: Savings Bond Designations
If you want to buy savings bonds:
- Enter the exact amount you want to use for bond purchases (up to $5,000)
- Indicate the bond owner’s name and the co-owner or beneficiary, if applicable
- These bonds will be mailed to you in paper form
Important Rules and Tips
- You cannot use Form 8888 to split a refund on an amended return (Form 1040-X)
- If you request direct deposit to a bank account, the name on the return must match the account
- If an account or routing number is invalid, the IRS will issue a paper check for that portion
- If you submit Form 8888 but your return includes errors, your entire refund might be delayed
- Never enter more than your total refund on Form 8888—doing so may cause rejection
What Happens If There’s a Mistake?
If the routing or account number is incorrect or the account is closed, the bank will reject the deposit and return the funds to the IRS. The IRS will then send you a paper check for that portion of the refund. However, the IRS is not responsible for errors caused by taxpayers, so double-check your numbers carefully.
Tracking Your Refund
Once you file your return with Form 8888, you can track your refund using the “Where’s My Refund?” tool on the IRS website or mobile app. The tool provides real-time updates about the status of your return and deposit.
When Form 8888 Is Not Necessary
If you are only depositing your refund into one account, you do not need to use Form 8888. Instead, you can directly enter your routing and account number in the appropriate section of Form 1040.
Benefits of Using Form 8888
There are several benefits to splitting your refund:
- Helps with automatic budgeting
- Supports financial goals such as saving, investing, or paying off debt
- Allows purchase of U.S. Savings Bonds directly through your refund
- Reduces the temptation to spend the entire refund impulsively
Common Mistakes to Avoid
- Entering incorrect account or routing numbers
- Allocating more than your total refund amount
- Attempting to split the refund between multiple taxpayers’ accounts
- Submitting the form with handwritten errors or without signing your return
- Using Form 8888 for amended returns (not allowed)
Final Thoughts
Using Form 8888 to split your federal tax refund is a smart financial strategy that can help you take control of your money from the moment it arrives. Whether you’re saving for a goal, investing for retirement, or rewarding yourself with a personal purchase, the ability to divide your refund gives you more control and flexibility. Just be sure to follow the IRS instructions carefully, double-check your account information, and file the form accurately. With proper planning and execution, Form 8888 can be a powerful tool for financial management.
