TULSA - The Oklahoma Tax Commission, OTC, is changing the way many people will receive their state refunds.
Refunds that are not designated for direct deposit will be issued as debit cards.
The Oklahoma Society of CPAs warns taxpayers to be sure you know and understand the fees associated with using the cards to keep the fees from cutting into your return.
OTC officials explain the changeover from checks is the result of a new state law requiring disbursements from the State Treasury to be in electronic form.
There are fees associated with using the cards ranging from ten-cents to $4.
Click here to see all of the specific details and associated fees on the OTC's Web site.
The company that issues the tax refund debit cards will pay to mail them to taxpayers. OTC officials estimate that will save the state $500,000 this tax season.
The debit card company will collect all the fees the card is subject to; that money will not go to the state.
If you don't want your refund in the form of a debit card you can chose direct deposit on your tax return.
Or if you receive the card and physically go to your bank to deposit your refund you won't be charged for that, either.
Here's the information issued by the Oklahoma Society of CPAs:
Beware of Fees Associated with Refund Debit Cards
New this income tax filing season, the Oklahoma Tax Commission (OTC) will issue debit cards instead of paper checks to Oklahoma taxpayers who do not choose direct deposit for their state income tax refunds.
Though the cards will no doubt be as convenient as gift cards and credit cards, the Oklahoma Society of Certified Public Accountants warns that card comes with fees that recipients should know about before authorizing any transactions.
According to the OTC, fees associated with use of the debit card include:
· Transfer of your refund to your checking or savings account (fee = $0.75);
· Inactivity fee if the card is not used for 60 days (fee= $1.50);
· Service charge will apply for cards used at any ATM that is not a MoneyPass ATM located in Oklahoma and surcharges are determined by individual ATM companies;
· Checking the balance of your card per phone: the first two are free and subsequent phone inquiries are $0.35 per call;
· Mobile balance alerts: the first alert is free and subsequent alerts are $0.10 each; and
· Foreign currency conversion fee is 2 percent.
In a release from the OTC, spokesperson Paula Ross stated, "The Oklahoma Tax Refund Debit Card will make it easy for taxpayers to receive their tax refund. The debit card program is a safe, convenient and secure alternative to direct deposit for receiving an income tax refund."
The OTC stated that upon activation, the Oklahoma Tax Refund Debit Card can be used at stores and ATMs that accept MasterCard debit cards. The card is inactive when it arrives in the taxpayer's mailbox. To activate, a taxpayer must call the toll-free number found with the card, enter the card account number along with the taxpayer social security number and zip code, and assign a pin to that card.
"We think the debit card is good alternative to paper checks," he added. "However, we strongly urge all recipients of the card to be fully aware of the variety of fees that apply for various transactions and rules for joint filers."
If you are receiving a refund, CPAs encourage you to review withholdings, rather than give the government an interest-free loan, which is basically the scenario when one receives tax refunds.
CPAs have the expertise to advise on a variety of financial concerns, including tax withholdings. If you don't have one, you can find a CPA with the OSCPA's free www.oscpa.com at KnowWhatCounts.org.