Tax refunds via debit cards didn’t work for Uncle Sam last year, but maybe the Empire State will have better luck.
The New York Department of Taxation and Finance announced this week that the state’s taxpayers can now choose to receive their personal income tax refunds on a prepaid MasterCard debit card.
Click image to view a video on the NY tax refund debit card option.
The option was created to provide folks without a bank account a way to have their refunds directly deposited.
New Yorkers can choose the debt card refund method when they file their tax returns.
Once the return is processed and refund is OK’ed, the money will be deposited into a bank account and your card — or two cards if you filed a joint return with your spouse, one for each of you — will be mailed to you.
When you get it, just activate it and use it as you would any other debit card.
Bank alert: Now here’s where some folks might have an issue.
The financial institution with which New York tax officials have partnered is Bank of America.
Still want the card?
Fine.
A lot of folks are adamantly anti-BoA, but others don’t have a problem with the bank. I just wanted you to know.
Other rules, possible fees: Once you activate your New York tax department refund debit card you can use it for purchases as you wish wherever such cards are accepted.
Your first bank transaction is free. You noticed that “first,” right? You might face a $1 charge for each subsequent withdrawal.
But there are no fees for purchases.
And you don’t have to use it regularly to keep the card active.
As for quick cash, if you use in-network ATMs — those are Bank of America and Allpoint machines — you won’t face any charges for those transactions.
The New York tax office has published a complete fee schedule.
Of if you prefer, you can bring the debit card to a bank and cash out the entire refund amount.
Federal follow-up: I’m sure the U.S. Treasury Department and Internal Revenue Service will be closely watching the New York program. And that earns this post today’s Follow-up Friday honors.
The New York program looks to be more streamlined than the ill-fated federal pilot program that failed miserably last year.
If the refund debit card works well in the Empire State, perhaps Uncle Sam will be able to follow New York’s plan and one day reissue a debit card for IRS refunds.
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