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Screen Bank - Deposit, Electronic Funds Withdrawal (1040)
Overview
Use this screen to enter bank account information for up to three bank accounts, refund allocation information, and U.S. Series I Savings Bond purchase information for up to three different individuals. The following information will proforma to the following year:
IRS Security Summit guidelines require that all proforma'd bank information be verified with the client every year. To print a Bank Account Verification Worksheet, mark the
Print Bank Account Verification
box under Setup
, 1040 Individual
, Other Return Options
on the Other
tab.- Refund allocation percent fields.Dollar amount fields won't proforma.
- Savings bonds information.Savings bonds information by default won't proforma, but can be proforma'd by usingProforma bond information to 2016.
Direct Deposit/Electronic Funds Withdrawal Information
Use this section to enter the primary account information. The primary account is used for all electronic funds withdrawals. The primary account can also be used in the refund allocation. Complete bank information is necessary and includes the routing transit number, name of financial institution, depositor account number and the type of account.
UltraTax CS considers an account valid if it contains complete bank information. Complete bank information includes all of the following:
- Verification of all bank information by the taxpayer
- Valid routing transit number
- Name of the financial institution
- Depositor account number
- Type of account
Only the primary account may be used for electronic funds withdrawal. You can't allocate withdrawals from multiple accounts.
note
- UltraTax CS also uses the primary account information from this section to generate the e-file "Electronic Funds Withdrawal" with balance due returns. See theELFscreen instructions for more information on e-file "Electronic Funds Withdrawal." To generate the e-file payment,Electronic funds withdrawal for balance due returns: Requested payment datein theELFscreen will need to have a date entered. The e-file payment is only generated whenElectronic funds withdrawal for balance due returns: Requested payment datein theELFscreen has an entry.
- If you've selectedDirect depositfromDisbursement Methodin theRALscreen, UltraTax CS uses the account information entered in thePrimary Accountfields for the client's bank account information on the bank product. UltraTax CS generates a diagnostic if you haven't completed these fields and requestedDirect depositin theRALscreen.
- For all state returns other than California, Maryland, Ohio, and nonresident District of Columbia, only the primary account information applies. Only California, Maryland, and nonresident District of Columbia support multiple accounts for direct deposit.
- Beginning with tax year 2009, a request to use a refund (or part of a refund) to buy up to $5,000 in U.S. Series I Savings Bonds can be made. The amount requested for savings bonds will need to be a multiple of $50 but can't exceed $5,000. The bonds will be issued in the name of the taxpayer, and in the names of both taxpayer and spouse when married filing jointly.
- Beginning in January 2015, the IRS will enforce a limit for each financial account or prepaid debit card of three direct deposits. For the fourth (and subsequent) requested deposits of a tax refund into the same account a paper check will be issued. The IRS has enacted this limit to help prevent fraud and also to prevent tax return preparers from collecting payment by directing all or a portion of a taxpayer's refund into the tax return preparer's own account.
A custom paragraph may be selected to include instructions on how to revoke an electronic funds withdrawal payment in the transmittal letter. To select this custom paragraph on a client basis, select custom paragraph
Electronic funds withdraw (TL)
from one of the Paragraph Description
fieldviews in the Letter
screen. To select this custom paragraph to print for all clients, select Setup
, 1040 Individual
, select either Letters & Emails
or Filing Instructions
in the Federal
tab, select the Custom Paragraphs
tab, and mark the Electronic funds withdraw (TL)
box.Taxpayer verified all bank information by:
Beginning in January 2017, IRS Security Summit requirements specify that bank information will need to be verified annually by the taxpayer. This field is required when any bank information is entered on this screen. Bank information won't transfer to the return until this field has been completed.
note
When this field has been completed, all bank information on this screen is protected from changes because the fields are not available for data entry. If a change is needed later, this field will need to be cleared in order for the fields to become available again. In this case, the bank information will need to be reverified.
- If eSignature is used to complete the Bank Account Verification,1is automatically entered after the successful eSignature has been retrieved. You can't manually enter a1in this field.
- Enter2if a Bank Account Verification worksheet is printed, then signed by the taxpayer.
- If the taxpayer verifies the bank information while completing a Web Organizer,3is retrieved in this field with the completed Web Organizer. This value will need to be accepted by the preparer during the review of the retrieved Web Organizer data.
- Enter4for any other method used to verify banking information. This could include a 3rd party eSignature solution, a custom verification document, or any other solution generated outside of UltraTax CS that's used to verify bank information by the taxpayer.
- If this screen contains bank information that's not required (such as a zero balance return or a payment due return that's not using electronic funds withdrawal), enter5to clear the diagnostics and retain the bank information to proforma for next year.
note
To print the Bank Account Verification Worksheet when it's not required, select
Setup
, 1040 Individual
and select Tax Return
under the Collation
group box. In the Return Collation
window, select Bank Account Verification
from the list then select Always if data
in the Print conditions
group box.Routing transit number
Enter a valid routing transit number. To meet IRS requirements, a valid transit number will need to be nine numbers (no hyphens) with the first two digits within the range of
01-12
or 21-32
. UltraTax CS will consider an account with an invalid routing transit numbers as incomplete and fire a diagnostic.UltraTax CS considers an account valid if it contains complete bank information. Complete bank information includes all of the following:
- Verification of all bank information by the taxpayer
- Valid routing transit number
- Name of the financial institution
- Depositor account number
- Type of account
Accounts missing this information won't be used in either refund allocations. If the primary account is missing this information, electronic funds withdrawal requests won't be processed.
note
This field is used by datasharing to make the bank name available for sharing. Large banks have more than one routing transit number, so the name of the institution can't be used to share the routing transit number.
Name of financial institution
Data entry in this field is required in order to consider the account information complete for 1040 processing. If this field is left blank, the account won't be used for electronic funds withdrawal (Primary account only) or used in refund allocations.
Depositor account number
Data entry in is this field is required in order to consider the account information complete for 1040 processing. If this field is left blank, the account won't be used for electronic funds withdrawal (Primary account only) or used in refund allocations.
Type of account
Select the type of account. The type of account codes are listed in the table that follows and in the fieldview.
1 | Savings |
2 | Checking |
3 | IRA (Traditional, Roth, or SEP-IRA) |
UltraTax CS considers an account valid if it contains complete bank information. Complete bank information includes all of the following:
- Verification of all bank information by the taxpayer
- Valid routing transit number
- Name of the financial institution
- Depositor account number
- Type of account
Accounts missing this information won't be used in either refund allocations. If the primary account is missing this information, electronic funds withdrawal requests won't be processed.
note
- Type of account 3 isn't available for the Primary account, as it also involves electronic funds withdrawal. Use either of the secondary accounts to direct deposit to an IRA account.
- Custom ParagraphDirect deposit to IRAis marked by default to notify taxpayers of their obligations prior to requesting a direct deposit to an IRA account and instructions to verify current tax year contributions are received in a timely manner.
Secondary Bank Account(s)
Cryptocurrency information
Use this statement if you entered code
4
in Disbursement type
. This information is required for electronic filing purposes only and isn't used by any forms.Joint account
Some financial institutions will deny the direct deposit of a joint tax refund into an individual account. When this occurs, a paper check will be issued, which may cause delays of up to ten weeks. This field is used for client document purposes only, and works in conjunction with Custom paragraph
65 Joint tax refunds (FI)
. The paragraph will print in the filing instructions when any of the fields for any of the accounts is left blank. Enter X
to indicate that the account contains both the taxpayer and spouse names.Non-US financial institution
This field only affects state returns. Enter
X
if the funds for an automatic payment withdrawal come from an account outside the United States, or if the direct deposit refund will go to an account outside the United States.note
Certain states don't let direct deposit or debit for returns that involve an International Automated Clearing House transaction (IAT). IAT rules are maintained by the National Automated Clearing House Association.
Refund Allocation Information
Use this section to enter the refund allocation information, including accounts to receive the deposits, savings bonds purchases, and selecting the order in which the refund is allocated. The refund can be allocated using dollar amounts or percentage of refund. Refunds can be allocated to the following:
- Up to 3 separate bank accounts
- For the purchase of U.S. Series I Savings Bonds
- Paper check
note
When allocating to secondary banks or the purchase of bonds, data entry is required in the
Secondary Bank Account(s)
and Bond Registration
sections.Dollar, Percent fields
Use the fields provided to allocate the expected refund either based on a dollar amount or percentage of total refund. Refunds may be allocated to any, all, or a combination of the following:
- Primary account
- Secondary accounts 1 or 2
- Purchase of U.S. Series I Savings Bonds for taxpayer and spouse if married filing jointly
- Purchase of U.S. Series I Savings Bonds for persons other than the taxpayer or spouse
- Paper check
Refunds can be allocated to the different options using a mixture of dollar and percent methods. You can't mix allocation methods on a per option basis. Once data is entered in the one field, the other field won't be available for data entry. For example, if $100 is entered in the primary account's
Dollar
field, the corresponding Percent
field will become shaded. To access the shaded field, remove the data in the unshaded field.If data entered exceeds the expected refund, UltraTax CS allocates based on the allocation order. Once the actual refund has been allocated, any remaining options will be ignored. For example, if the actual refund is $800 with $1,000 entered in the primary account's dollar field, and $750 is entered in the secondary account 1's dollar field, UltraTax CS allocates all of the expected refund to the primary account.
Valid accounts that don't contain either a dollar or percent amount will, by default, get any unallocated balance. When there's no account to default the unallocated balance to, UltraTax CS defaults to the last valid account. UltraTax CS doesn't default any unallocated balances to purchase of bonds. UltraTax CS considers an account valid if it contains complete bank information. Complete bank information includes all of the following:
- Verification of all bank information by the taxpayer
- Valid routing transit number
- Name of the financial institution
- Depositor account number
- Type of account
If purchasing bonds for the names on the return (i.e. if married filing jointly bonds will be registered in both the taxpayer and spouse names), use the
Bonds for names on tax return
fields. Use the Bonds other
fields when bonds are being purchased for persons other than the taxpayer (and spouse if married filing jointly), or to register the bonds to either the taxpayer or spouse instead of both if married filing jointly. UltraTax CS properly allocates the purchase of bonds using the maximum total purchase of $5,000 in $50 increments. UltraTax CS always rounds down when adjusting for the $50 increment. Any remaining refund due to limiting the purchase will be defaulted either to the last valid bank account or paper check.All fields provide an option for zero data entry. This lets the data to proforma to the following year without being used by the current year return. This also lets the primary bank to be used for the electronic withdrawal of estimates while using the secondary bank for a direct deposit of the refund.
IRS Security Summit guidelines require that all proforma'd bank information be verified with the client every year. For example, if the client closed an account or if the bank's routing transit number or account number changed due to merger.
note
Data entry is required in the
Secondary Bank Accounts(s)
and Savings Bonds Registration Information
sections to allocate refund to either of these two options.Refund allocation order
You can no longer purchase U.S. Savings Bonds with a tax refund, starting on January 1, 2025. Any U.S. savings bond input present on Screen Bank in the General folder in UltraTax 2023 will not proforma to UltraTax 2024. Also, if you selected a refund allocation method that included U.S. savings bonds on Screen Bank it will be updated on proforma to an option that does not include U.S. savings bonds.
Direct deposit refund (Force)
UltraTax CS defaults to not submitting a direct deposit request (either on 1040 page 2 or on Form 8888) when a client falls into the IRS Direct Deposit Reject 44 situation. Enter an
X
to force UltraTax CS to process the direct deposit request. An IRS Direct Deposit reject 44 situation exists when the total direct deposit request is $10,000 and total tax is zero and withholding plus excess FICA totals $10,000 or more. Forcing the direct deposit in this situation may still result in the taxpayer receiving a paper check and a possible 10 week delay in receiving the refund.note
A custom paragraph may be selected to notify the taxpayer that their direct deposit request couldn't be submitted due to IRS limitations, or if this field is marked, alerting the taxpayer that the direct deposit request may be rejected by the IRS and a paper check may be issued. To select this custom paragraph on a client basis, select custom paragraph
IRS Direct Deposit Limit (FI)
from one of the Paragraph Description
fieldviews in the Letter
screen. To select this custom paragraph to print for all clients, select Setup
, 1040 Individual
, select either Letters & Emails
or Filing Instructions
in the Federal
tab, select the Custom Paragraphs
tab, and mark the IRS Direct Deposit Limit (FI)
box.Secondary Bank Account(s)
Cryptocurrency information
Use this statement if you entered code
4
in the Disbursement type
field. This information is required for electronic filing purposes only and isn't used by any forms.Savings Bond Registration Information
Savings bond registration information
Use the fields provided to enter the bond registration information when either purchasing bonds for persons other than the taxpayer (and spouse if married filing jointly), or to register the bonds separately for the taxpayer or spouse, if married filing jointly. Names will need to be entered using the following rules:
- Enter only one name for owner, co-owner, or beneficiary.
- Enter the person's given name. Don't use nicknames.
- Use only letters. Don't use special symbols.
- UseIndicate name is for beneficiaryto indicate beneficiary status instead of co-owner status.
note
- Data will need to be entered in theBonds other 1orBonds other 2fields in theRefund Allocation Informationsection for bonds to be purchased with the refund.
- By default, bond information won't proforma to the following year. UseProforma bond information to 2016to proforma the information in these fields.
- The following custom paragraphs are selected by default regarding savings bonds purchase:
- Refund Savings Bond (FI):Reports the total amount of bonds purchased, that the bonds will be mailed to the taxpayer, and a contact number for the Treasury Retail Securities.
- Refund Savings Bonds Registration:When bonds are purchased for persons other than the taxpayer (and spouse if married filing jointly), this paragraph will report the bond registration information.