February 26, 2013
Tax season is in full swing, but the way you receive your state tax refund is changing.
You can no longer receive your tax refund by paper check. Your only options now are direct deposit or a debit card.
However, if you choose the debit card, beware, there are some fees and penalties to know about before you cash in.
With the debit card, customers only get one free cash withdrawal a month. There is a $2.50 fee per withdrawal after that, as well as a small fee for balance inquiries on the card.
Also, there is a fee of $3 per month after six months of inactivity on the card.
Experts warn to pay attention when you're filing your taxes, because if you don't designate how you want your return, then you'll automatically get the debit card.
"If you want to get it through direct deposit, which is one of your choices, you must tell the government when you file your return that you want it through direct deposit and provide your bank account info," said Darden Accounting Professor Mary Margaret Frank. "If you don't do that, by default, you will get a bank card."
Experts say if you're going to use the debit card, it's best to cash it out immediately.
And don't hold onto the debit card for too long, because after twelve months it is deactivated.
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