The Complete Guide To Bank Products For Tax Preparers

Bank products can be the difference between a “good season” and a “record season” because they remove the biggest friction point for many taxpayers: paying your fee upfront. 

When you understand how bank products work (and how to price, disclose, and deliver them correctly), you can expand your client base, improve cash flow, and streamline fee collection, without adding chaos to your workflow.

That understanding matters even more now that the federal government is moving away from paper checks. The Treasury has announced that it will stop issuing paper checks for most federal payments after September 30, 2025, and the IRS has published guidance on phasing out paper tax refund checks for individual taxpayers.

In this new environment, knowing how to offer and manage bank products effectively is no longer a competitive advantage but a baseline requirement. This guide breaks down what bank products are, the benefits and tradeoffs, how fees work, when to offer them, which clients tend to choose them, and how to implement them without creating mid-season headaches.

What Are Bank Products For Tax Preparers?

Bank products are refund-related financial services that let your clients pay your preparation fees from their refund and, in some cases, access funds earlier through a short-term loan. 

In a typical setup, the refund is routed to a refund settlement bank, fees are deducted as authorized, and the remaining refund is disbursed to the taxpayer.

Think of bank products as a structured way to handle two things at once: collecting your fee from the refund and delivering the client’s net refund through approved methods.

Why Bank Products Matter In An Electronic-Only World

The shift away from paper checks puts pressure on “refund delivery” in a way many offices did not feel a few years ago. Clients still want simple options, and your office gets pulled into the “how will I receive my money?” conversation, whether you want to be or not.

There is a real service gap for clients who don’t use traditional banking. In the 2023 FDIC National survey, 4.2% of U.S. households were unbanked, and 14.2% were underbanked. 

That’s a meaningful share of taxpayers who may not have a standard checking account relationship, or who rely heavily on nonbank alternatives.

Types Of Bank Products For Tax Preparers

Most professional tax bank products fall into a few predictable categories. Start with the foundational option (refund transfers) and add additional products only when your workflow can support them. 

The best mix depends on your client base, pricing model, risk tolerance, and the competitiveness of your local market.

Refund Transfers

A refund transfer (often marketed as “pay-by-refund”) lets the taxpayer pay your preparation fee from their refund rather than out-of-pocket. It’s typically the foundational bank product because it directly solves fee friction.

Conceptually, a refund transfer is a fee collection and disbursement service. The settlement bank receives the refund, deducts authorized fees (including your prep fee and any bank product fees), pays you, and then disburses the remaining funds to the client.

Why refund transfers are the core product:

• You reduce unpaid balances because fees are collected as part of the refund flow.
• You can serve clients who would otherwise walk due to the upfront payment barrier.
• Your staff spends less time on collections and more time on preparation.

How it’s positioned to taxpayers:

• “No upfront payment for prep fees”.
• “Fees deducted from refund”.
• “Choose how you receive the rest (direct deposit, check, prepaid card)”.

Common fee structure: the taxpayer pays a refund transfer fee (varies by provider), and there may be an additional fee for a second deposit (for example, adding a state refund disbursement).

Refund Advances

Refund advances (refund anticipation loans) are short-term loans made against a taxpayer’s expected refund. The loan is repaid when the refund is received, and IRS approval is subject to underwriting and eligibility requirements.

Many advance programs start as early as January 2 (season-dependent) and may run into mid-March or mid-April, depending on the lender and product.

Advances can be offered up to a portion of the expected refund (net of fees), and costs vary. Some programs market 0% APR for certain tiers, while others include fees and/or APR on larger advances, so your office should always disclose the exact terms for the program you’re offering.

Key realities to communicate clearly:

• This is a loan, not the refund itself.
• Approval is never guaranteed.
• A refund advance does not make the IRS process the return faster.

By offering a taxpayer advance early in the season, your tax office is able to remain competitive against the big box competition. You can provide valuable cash to customers when they need it most – Ian Gardner, Sales and Business Development Director, Sigma Tax Pro

Pre-Ack Vs Post-Ack Loans

These are both types of refund advances, and are used by banks structure advances around IRS acknowledgment timing:

• Pre-ack loans: decisioning can start before IRS acknowledgment, but funding often depends on program rules and controls.
• Post-ack loans: the bank typically waits until the IRS acknowledges/accepts the e-filed return before funding.

This matters because “how fast” you can deliver is one of the main marketing angles, so you want your office scripts, signage, and expectations aligned to the program’s actual funding trigger.

Prepaid Cards, Checks, And Other Disbursement Options

Once the bank deducts authorized fees, the client’s remaining refund can usually be disbursed via:

• Direct deposit
• Printed check
• Prepaid debit card
• Sometimes “faster” deposit options tied to specific rails and eligibility

Direct deposit is generally the fastest “standard” method when paired with e-file. The IRS states that most refunds are issued in less than 21 days for e-file with direct deposit, and they explicitly advise taxpayers not to rely on a specific refund date.

ERO Advances And Office Funding

Not every “bank product” is taxpayer-facing. Many providers offer ERO funding (pre-season or in-season advances) designed to help your office manage cash flow for software, rent, staffing, marketing, and growth.

Common structures include:

• Pre-season office loans: (often based on prior-year volume).
• In-season ERO advances: tied to funded returns or fee withholding.
• Software purchase assistance: programs that front software costs and repay via season fee flow.

These can be powerful, but you should treat them like any business financing decision (cost of capital, repayment mechanics, and operational constraints).

Benefits Of Bank Products For Tax Preparers

Bank products can boost revenue and operational stability because they increase conversions and reduce collections work. They can also improve the client experience when presented clearly and handled consistently.

Benefits At A Glance

Here’s a breakdown of the benefits for your office and the taxpayer:

Measurable Outcomes Tax Offices Care About

Bank products can improve the numbers that matter most to a tax office, such as conversion rate, cash flow consistency, and time spent on collections. The biggest gains are usually seen in the following:

• Higher conversion during peak weeks: when clients are shopping multiple offices, “no upfront fees” is a straightforward differentiator that gets you ahead of the competition.
• Improved fee-collection mechanics: refund transfers automate fee collection by design, reducing time spent on follow-ups and leading to fewer awkward payment conversations.
• Disbursement flexibility: clients may prefer prepaid cards or checks depending on their banking situation.
• Bigger addressable market: the US Government Accountability Office (GAO) has reported that millions of taxpayers use refund-related financial products, and usage patterns often skew toward taxpayers who value speed and flexibility. That audience overlaps heavily with the “can’t pay upfront” segment many independent offices want to serve.

Compete With Large Tax Franchises And DIY Options

Offering advances can cost the office owner more because some programs include additional fees, operational steps, and support overhead. 

The tradeoff is competitiveness with large tax franchises, like Jackson Hewitt and Liberty Tax, that heavily market refund-advance timing and “get money early” messaging, which shape client expectations in your market.

Even DIY platforms compete on refund speed with features like early refund delivery and refund advance offers. If you don’t offer comparable options, you may lose price-sensitive and speed-driven clients before you ever get to your value story.

Benefits For Taxpayers

For taxpayers, bank products mainly create more flexible ways to pay your prep fee and receive their refund. The most common client-facing benefits include:

• More payment flexibility: they can pay your fee from the refund, which makes professional prep accessible to more taxpayers.
• More delivery flexibility: they can choose from supported disbursement options, which matters when they don’t want paper checks or don’t use standard banking.
• Earlier access when eligible: refund advances can provide funds earlier for approved clients, but they must be presented as a loan with terms and eligibility requirements.

Considerations When Deciding If Bank Products Are Right For You

Bank products are usually worth it if you want to reduce fee friction and offer more refund delivery flexibility, but they work best when your office has consistent intake, clear fee disclosures, and a plan for exceptions. 

If you don’t have those pieces, bank products can lead to increased support issues and client confusion.

Your Operational Readiness

Bank products are easiest when your team can follow a repeatable process: present options, review fees, capture consents, and track status. If your office struggles with documentation, identity verification, or consistent scripting, start with refund transfers before adding advances.

Your Risk And Support Tolerance

Refund-related products can attract fraud attempts, and delays, rejections, or offsets can trigger complaints if expectations are poorly set. The OCC’s risk management guidance for banks offering tax refund-related products is a good reminder of the broader risks associated with these programs.

What Are The Fees Associated With Bank Products?

Bank products can include multiple fee layers, and your profitability depends on explaining them clearly and choosing the right structure for your client base. The cleanest approach is to review fees in plain English before the client selects a bank product.

Common Fee Categories

Here’s a simple breakdown you can adapt to your office:

Fee Transparency: The Shortcut To Fewer Complaints

Refund-related products can carry multiple fee layers: bank fees, technology fees, transmitter fees, and your prep fees. Clients care about “how much do I get net” more than fee category names. 

Your goal is to show the net refund after fees and clearly explain that a refund advance is a loan that does not speed up the IRS’s processing of the refund. 

Different providers and software platforms structure these differently, so your best protection is a consistent disclosure workflow and a “fees-first” conversation when a client chooses a bank product.

Sigma Expert Quote Placeholder: By explaining the fees clearly to your customer, they can better understand that you, as their tax preparer, are not the one receiving those fees. This transparency helps to build trust and understanding. Many times, tax professionals don’t describe these fees clearly, which leads the customer to believe they are being overcharged, and not paying the fees they originally agreed to. – Ian Gardner, Sales and Business Development Director, Sigma Tax Pro

When Should I Offer Bank Products To My Clients?

Offer bank products early enough to reduce price friction, but late enough that you can explain fees accurately. The best timing is usually a two-touch approach.

Touch One: First Contact Or Appointment Scheduling

Mention bank products as an option when the client is shopping. Keep it simple: “We offer pay-by-refund, and in some cases, refund advances are available if approved.”

This helps you compete without overselling speed. The IRS is clear that e-filing and direct deposit are the fastest standard option, and 90% of refunds are issued in less than 21 days in typical circumstances.

Touch Two: Fee Discussion And Signature

Confirm the selection when you review pricing and before e-file. This is where you show the client the fee summary, their disbursement choice, and the “net to client” estimate.

If the client asks about timing, anchor expectations to IRS guidance on why it may take longer than 21 days for some taxpayers (not marketing language). 

Which Of My Clients May Be Interested In Bank Products?

Clients typically choose bank products for one of two reasons: they can’t (or don’t want to) pay your fee upfront, or they want more flexibility in how and when they receive funds.

Clients Who Often Want Refund Transfers

• Clients who ask, “Do I have to pay today?” may be living paycheck to paycheck and don’t have the savings to pay upfront to file their taxes.
• Clients who prefer the convenience and are more comfortable paying your fee from the refund instead of out-of-pocket.
• Clients who prefer a single, bundled flow (prep fee + disbursement handling).

Clients Who Often Ask About Refund Advances

• Clients who need funds quickly for time-sensitive expenses.
• Clients influenced by big-box marketing and “get funds early” messaging.
• Clients with sufficient expected refunds where the net benefit still makes sense after fees.

The Consumer Financial Protection Bureau advocates keeping the compliance line clear. A refund advance is a loan, and it does not mean the IRS issues the refund sooner.

Clients Who Benefit From Flexible Electronic Delivery

As paper checks are phased out for most federal payments, clients without traditional banking can face real friction. FDIC data shows that millions of households are unbanked or underbanked, which is why prepaid or alternative electronic delivery options (where supported) are more important than ever.

How Do Tax Preparer Bank Products Work?

Bank products work by routing a client’s refund to a settlement bank first, deducting authorized fees (including your prep fee), then disbursing the remaining refund to the taxpayer. When advances are involved, the bank funds an approved short-term loan and is repaid when the refund arrives.

Step One: Choose A Bank Provider And Enroll Your Office

Most providers require an application and approval process before you can offer bank products. If you e-file returns, you also need the appropriate IRS e-file credentials (including an Electronic Filing Identification Number (EFIN) for the firm). The IRS provides a guide for tax offices that want to become an authorized e-file provider.

Step Two: Configure Bank Products Inside Your Tax Software

This typically includes:

• Selecting the bank provider
• Setting default fee structures (and guardrails)
• Confirming disbursement options (DD/check/prepaid)
• Enabling required disclosures and e-signature flows

Step Three: Present Options During Consultation (Without Selling Too Hard)

Offer bank products as a payment/disbursement option, not a “must-have upgrade.”

A simple script:

• “You can pay today by card/ACH, or you can choose pay-by-refund with a refund transfer.”
• “If you want funds early, you may be eligible for a refund advance loan. It’s optional, approval-based, and terms vary.”

Step Four: Complete Return, Run Eligibility Checks, And Collect Consents

If the client selects a bank product:

• Confirm identity and intake accuracy (bank products are a fraud target)
• Present the fee summary clearly
• Obtain required consents (including any data-sharing permissions required by your process)

Step Five: E-File The Return With Bank Product Information

The return includes instructions for routing the refund to the settlement bank (not directly to the taxpayer).

Step Six: Monitor Status And Resolve Exceptions Fast

Clients can check refund status using the IRS Where’s My Refund? tool. The IRS says a refund status usually appears within 24 hours after e-filing a current-year return (and longer for paper filing).

Common exceptions include:

• IRS delays or review holds
• Refund offsets for debts (child support, government debts, or other prior tax liabilities)
• Rejected returns needing correction
• Mismatched disbursement details

For offsets, IRS Topic 203 explains the Treasury Offset Program (TOP), including why refunds may be reduced and how taxpayers can follow up. Clients who need the official Treasury explanation can find it at the Bureau of the Fiscal Service, which provides TOP and tax refund offset guidance and public FAQs.

Step Seven: Funding, Fee Split, And Disbursement

When the refund arrives:

• The bank deducts authorized fees (your prep fee + product fees)
• Your fee is paid to you
• The remainder is sent to the taxpayer by their selected method

Major Bank Product Providers

Bank product providers differ most in (one) how broad their product lineup is, (two) how “hands-on” their portals and workflows feel for your staff, and (three) which types of offices they’re best suited for (new offices vs high-volume firms). 

Below is a short summary of each provider, followed by a clearer comparison table of offerings and information to help you choose which provider best suits your office’s needs.

PayDash

PayDash provides bank product solutions designed to help tax offices grow by making “pay-by-refund” simple and easy to deliver. It’s a strong fit for tax pros who want a straightforward refund transfer setup with a client experience built around convenience and support.

For many tax offices, the biggest benefit is immediate, as there’s no need to pay your prep fees upfront. Instead, fees are deducted from the taxpayer’s refund and then deposited into your office once the refund is funded.

TPG (Santa Barbara Tax Products Group)

TPG is a well-known, full-suite provider with a broad lineup across refund transfers, taxpayer advances, pre-season funding, in-season funding, and prepaid card programs. If you want one provider that can cover both client-facing products and office funding, TPG tends to fit that “all-in-one” preference. Common product names include PreSeason Funds, Simply Paid, Fast Cash Advance, and GreenDot Cards.

EPS Financial

EPS offers a broad set of bank products with multiple program tracks, including refund transfers (with different RT program structures), taxpayer advances, and office funding options. EPS is often a good fit for offices that want flexibility in how they structure refund transfers and disbursement experiences. Common product names include E-Collect, E-Advance, Start Up Advance, Fee Assist/Fee Advance, and Taxpayer Advance Loan.

Refund Advantage

Refund Advantage provides a similar “full menu” approach for tax offices, covering refund transfers, taxpayer advances, and office funding programs. It’s typically positioned for offices that want a modern portal experience and standardized program options across the season. Common product names include Start Up Advance, Fee Assist/Fee Advance, and Taxpayer Advance Loan.

Republic Bank Tax Refund Solutions

Republic Bank is a major name in the bank product ecosystem and is notable for having both pre-season and in-season ERO funding programs, plus taxpayer advances. It can be a strong option for offices that want a dedicated “office funding” track in addition to the standard pay-by-refund workflow. Common product names include PreRAP, RAP, and Easy Advance (“EA” Plus).

Bank Product Offerings Comparison

Here’s a simple breakdown of the providers and the products they offer:

What To Compare When Choosing A Provider

Choosing a bank product provider is less about brand name and more about fit for your office workflow and client base. Focus on the factors that affect day-to-day operations and the client experience:

• Refund transfer pricing and second-disbursement fees: affect your client’s net refund and your positioning.
• Advance structure and eligibility logic: some programs emphasize “no-cost” smaller tiers, then apply APR on higher tiers.
• Disbursement experience: clients receive prepaid cards? Can you print checks in-office? Is direct deposit fast and reliable?
• Rebates and revenue share: some providers publish potential revenue share structures for EROs.
• Support tooling: taxpayer portals, status tracking, and operational dashboards matter more than most offices expect.

The biggest issues clients face when switching bank product providers are transferring their existing volume, not qualifying for programs, and learning the new system. If you have an existing bank product volume with one bank, you are able to export that data and provide it to the new bank, which can help you qualify for all the same programs you earned at the previous provider. Learning to navigate the new system is also important, so you are able to run accurate and detailed reports about your customers, to stay ahead of any issues before they happen. – Patrick Seymour, Business Development Executive, Sigma Tax Pro

How To Choose Your Bank Product Provider

The table below makes it simpler to decide which provider to choose for your office’s needs:

Integrating Bank Products With Your Professional Tax Software

Bank product integration should feel like a repeatable workflow inside your professional tax software, not a separate system your team has to “work around.” With Sigma Tax Pro, supported bank products integrate using the same core mechanism, so your staff doesn’t have to learn a completely different process for each provider.

What “Good Integration” Looks Like

Good integration is what turns bank products into a scalable part of your process instead of a seasonal headache. The right setup should result in:

• Bank application and onboarding support: your software should help you complete enrollment cleanly and track approval steps.
• Built-in fee and product selection inside the return workflow: you don’t want staff toggling between multiple portals.
• Clear fee disclosure outputs: ideally, you can print or e-deliver a clean fee summary that clients can understand in under 30 seconds.
• Status visibility: should be able to see acknowledgments, funding updates, and exceptions without chasing support.

Don’t Skip The Compliance And Data Protection Layer

Bank products inherently touch sensitive taxpayer data. Make sure your internal process includes:

• Tight access controls for bank product screens
• Secure storage/handling of taxpayer documents
• Consent-driven disclosures and marketing practices

The IRS signposts tax professionals to Publication 4557 for safeguarding recommendations, and the FTC’s Safeguards Rule that requires covered firms to maintain an information security program (and, in practice, many firms implement a Written Information Security Plan).

The FTC has emphasized the importance of not misusing taxpayer data for unrelated purposes without consent, which is a useful reminder for any office using add-on products and cross-sells.

How Bank Product Integration Works In Sigma Tax Pro

Sigma Tax Pro integrates bank products through a consistent setup flow. All three of Sigma Tax Pro’s Professional Tax Software seamlessly integrate your chosen bank products. Any questions about software and its structures can be answered by a Sigma Tax Pro expert.

Once your office chooses the bank product providers and programs you want to offer, the next steps are straightforward:

• You send Sigma Tax Pro the required paperwork.
• Sigma Tax Pro registers the bank(s) and completes the integration within the software.
• Sigma Tax Pro sends you a confirmation email once setup is complete.
• You complete a short, easy compliance exam, then you’re ready to start offering bank products.

This approach keeps the operational side simple; your office focuses on client intake and return preparation, while Sigma Tax Pro handles the setup work that connects your software to the bank product provider.

Sigma Tax Pro takes a comprehensive approach to onboarding and getting tax offices set up. They handle the collection of paperwork, software and bank registration, installation of software, any networking needed in the office, as well as any issues that come up throughout the season. This positions Sigma Tax Pro as a one-stop-shop to allow tax professionals to focus on their clients, and growing their business. – Patrick Seymour, Business Development Executive, Sigma Tax Pro

Using More Than One Bank Provider

Many offices want flexibility as different programs appeal to different client segments. Sigma Tax Pro supports up to three banks at a time, giving you the flexibility to tailor your offering without locking your practice into a single provider.

There are a couple of important compatibility rules:

• PayDash only works with 1040-TW.
• Your three-bank setup can’t include two Pathward-backed providers at the same time, which means you can’t run EPS and Refund Advantage together.

If you’re unsure which combination makes the most sense for your office, the best path is to choose your top priorities (refund transfers only, advances, office funding, cards) and let Sigma Tax Pro guide you to a compatible configuration.

Getting Started With Bank Products

If you’re ready to offer bank products this season, use this checklist to get live quickly and safely.

Step One: Decide Which Client Segment You’re Serving

Start with one clear target:

• Clients who can’t pay upfront
• Clients who want the fastest possible access
• Clients who need flexible disbursement methods

This helps you choose the right mix of refund transfer and advance options without overwhelming staff.

Step Two: Choose A Provider Based On Fit, Not Hype

Compare:

• Published taxpayer fees
• Advance tiers and APR/fee disclosures
• Disbursement options
• Support, portals, and reporting
• Any ERO funding you actually need (and can repay comfortably)

Step Three: Build A Simple “Bank Products Script” For Your Office

Keep it short:

• Option A: pay today (card/ACH/cash)
• Option B: pay-by-refund (refund transfer)
• Option C: optional advance (loan; approval-based)

Step Four: Install Guardrails

Examples:

• Minimum net refund threshold for recommending refund transfers
• Clear rules for when you offer advances
• A mandatory fee review line-item (bank fee + tech/transmitter fee + your prep fee)

Have a one-page playbook for:

• Delays beyond 21 days (IRS review, errors, identity verification)
• Offsets and reduced refunds (TOP/IRS guidance)
• Rejections and quick fixes

Bank products are one of the most effective ways to grow a tax practice because they remove payment friction, improve fee collection, and give clients more flexibility, especially when integrated cleanly into your workflow.

If you want an all-in-one setup built specifically for tax pros, explore professional tax software with bank products from Sigma Tax Pro.

Common Questions About Bank Products

Will My Clients Get Their Refund Faster?

Often, yes. Bank products can be faster than waiting for a mailed paper check, and the IRS is moving away from paper refund checks for most taxpayers.

But the fastest standard route is still e-file plus direct deposit, and the IRS says more than nine out of ten refunds are issued in less than 21 days in most cases (assuming no issues).

It is also important to note that these don’t make the IRS issue refunds any faster. 

How Do Taxpayer Advances Work?

They are short-term loans based on the expected refund. They provide the funds earlier through the lender, with repayment from the refund when it arrives from the IRS.

Why Should I Pay More To Offer Advances?

Because advances can help you stay competitive for clients who prioritize convenience and early access options, especially in markets shaped by heavy refund-product advertising.

It’s My First Year. Why Use Bank Products If Most Programs Aren’t Available To Me?

Refund transfers and pay-by-refund workflows can still help you convert more clients and build volume. As you grow, more program tiers and options often become available, so you’re building the infrastructure now to unlock better opportunities later.