What is Form 8888?
Form 8888, Allocation of Refund (Including Savings Bond Purchases), is used to allocate your tax refund to two or more bank accounts and other financial institutions, including brokerage firms, mutual funds, and credit unions. Issued by the Internal Revenue Service (IRS) in the United States, this form lets you use part of your refund to purchase paper Series I savings bonds.
What is Series I Savings Bond?
Series I savings bond is a non-marketable savings bond in the United States that earns interest through the combination of a fixed and inflation rate. It is a long-term investment with 30 years maturity time, and can only be cashed a year after buying it. You may buy Series I Savings Bonds through your TreasuryDirect® account, or through paper savings bonds.
What is the purpose of Form 8888?
Use Form 8888 to directly deposit an amount of your refund to two or three accounts at banks or any financial institutions such as a brokerage firm, credit union, or mutual fund.
You may also use Form 8888 to buy a maximum worth of $5,000 paper or electronic series I savings bonds using your refund. It is essential for saving on a low-risk product that helps secure your savings from inflation.
However, you can’t have your refund deposited into more than one account nor buy paper series I savings bonds if you file Form 8379, Injured Spouse Allocation. Form 8379 is a form used by an adversely impacted spouse to regain their share of joint refund for spouses’ mutual obligations. Thus, if you file Form 8379, you will have a joint refund which can’t be directly deposited.
Though Form 8888 makes the refund process convenient, you cannot request a deposit of your refund to an account that is not in your name. Use either your or your spouse's bank account, but not with other relatives.
Do not complete this form if you wish to deposit a refund to only one account. Proceed to request a direct deposit on your tax return.
Form 8888 shall not be attached to Form 1040-X as the amended return is not eligible to buy savings bonds nor have it directly deposited to an account.
Here is the list of accounts that allow a direct depositing of refunds:
Checking Accounts — A bank account that uses checks for money transactions.
Savings Account — An account for a savings deposit.
Individual Retirement Arrangement (IRA) — An arrangement that takes some of your savings for your retirement. Refunds can be directly deposited into Roth IRA or SEP-IRA but not in SIMPLE IRA unless you establish your IRA at a bank or some eligible financial institution before requesting a direct deposit.
Health Savings Account (HSA) — A personal account of eligible taxpayers used for medical purposes.
Archer Medical Savings Account (MSA) — A type of health savings account intended for a self-employed individual or an employee of a company with less than 50 employees.
Coverdell Education Savings Account (ESA) — An account intended for beneficiaries for future qualified educational expenses.
Treasury Direct® Online — an online account used in the U.S. for security transactions such as Treasury Bills, Treasury Bonds, and Treasury Notes.
What is Direct Deposit?
Direct deposit is an electronic payment method, where the payee receives the payment without dealing with physical checks. The money is transferred electronically to the payee’s bank account.
Why use Direct Deposit?
Considering the complications of financial processes, direct deposits make financial transactions easier. Direct deposit provides you a convenient way to make and receive payments. Aside from it being processed faster than a physical check, you are confident that your payment is secure.
How to fill out Form 8888?
Name(s) shown on return
Enter your full legal name as shown on the return.
Your social security number
Enter your Social Security Number (SSN).
TIPS BEFORE FILLING OUT PART I
Skip Part I and proceed to Part II if you are filing Form 8888 solely for purchasing paper series I savings bonds.
Always enter your correct account information to avoid a lost refund.
Ask your financial institution for your exact routing and account number to ensure your direct deposit is qualified.
If you file a joint return and complete Form 8888, your spouse may get at least part of the refund.
Part I. Direct Deposit
Completing this part means you want to directly deposit a portion of your refund to one or more accounts.
Lines 1a, 2a, and 3a - AMOUNTS TO BE DEPOSITED
Enter the portion of your refund you want directly deposited to each account. Each deposit must be at least $1.
Note that your entire deposit may be deposited on one account, perhaps in the first account that you entered. Hence, enter your most trusted account first.
Lines 1b, 2b, and 3b - ROUTING NUMBER
The routing number must be nine digits, and the first two must be 01 through 12 or 21 through 32.
Refer to the sample check in the Instructions Section of Form 8888 for to learn about the routing number.
The account and routing number may be in different parts of your check. Thus, ask your financial institution for the correct routing number for the following situations:
The routing number on your deposit slip is different from the one on your check;
Your deposit is to a savings account that doesn't allow you to write checks; or
Your checks state they are payable through a financial institution different from the one at which you have your account.
Lines 1c, 2c, and 3c - CHECKING/SAVINGS
Mark the appropriate box for the account type.
For IRA, HSA, brokerage account, or other similar accounts, ask for assistance from your financial institution.
For Treasury Direct® online account, check the “Savings” box.
Lines 1d, 2d, and 3d - ACCOUNT NUMBER
An account number can have up to 17 characters and numbers and letters. Include hyphens but omit spaces and special characters. Begin writing from left to right and leave unused boxes blank.
Why is the Direct Deposit request rejected?
Your financial institution does not allow you to have a joint refund deposited to an individual account.
Names on your account and the refund don’t match, and your financial institution won’t allow you to deposit a refund.
You have directly deposited tax refunds thrice to the same account or prepaid debit card.
You failed to furnish a valid account number.
You file your 2019 return after the 30th of November 2020.
What causes a change in refund?
Refund increase. If you made an error on your return that caused your refund to increase, the additional amount goes to the last account listed on your Form 8888. If you wish to split the refund among three accounts, any increase goes to the account on Line 3. Suppose that you want to divide the refund among two accounts, the account listed on Line 2 gets the increase.
Part II. U.S. Series I Savings Bond Purchase
Accomplishing this part of Form 8888 means you want to purchase paper bonds with a portion of your refund.
You may request up to three different savings bond registration as long as it total to $5, 000. Each registration must be a multiple of $50.
Enter the desired amount of your refund you want to use in purchasing bonds for yourself or your spouse if filing jointly. Skip Line 4 if the bonds you are purchasing are not for yourself or your spouse.
Lines 5a and 6a
Enter the portion of your refund you desire to use in buying bonds for yourself, your spouse, or someone else.
Lines 5b and 6b
Enter only one owner’s name for bond registration. It must be you, your spouse, or someone else.
Lines 5c and 6c
If you want to add a co-owner or beneficiary, enter his or her name. Then, mark the box on the side if beneficiary destination, or else co-ownership will be assumed.
Why are bonds not issued?
Bonds won’t be issued due to the following:
The bond request isn’t a multiple of $50;
Your refund is decreased due to a math error;
You enter more than one name on line 5b, 5c, 6b, or 6c; or
Your refund is offset.
When the above reasons happen, or math errors increase your refund, your refund will be sent to you in the form of a check.
Part III. Paper Check
After completing Part I and II, the remaining portion of your refund may be sent as a check to you.
Enter the amount in the given space.
Part IV. Total Allocation of Refund
Add the amounts on Lines 1a, 2a, 3a, 4, 5a, 6a, and 7. If the total amount is different from the refund on your tax return, a check will be sent instead.
How to file Form 8888?
Attach Form 8888 to your income tax return. Do not submit a Form 8888 with crossed out or whited out numbers or letters, the IRS will reject your request.