Taxpayers across the country may be receiving deposits from TPG Products SBTPG LLC, unable to understand why their tax refunds are being processed in this manner. Put simply: The deposit is related to tax preparation services, particularly when taxpayers choose to pay for tax filing fees using their refund.
Why It Matters
TPG Products SBTPG LLC processes refunds for taxpayers who select the pay-by-refund option through tax software like TurboTax, TaxSlayer or H&R Block. The service allows users to deduct tax preparation fees directly from their refund, ensuring no upfront costs.
The IRS first sends the taxpayer’s refund to Santa Barbara Tax Products Group (SBTPG), which then deducts any applicable fees before transferring the remaining amount to the taxpayer’s bank account.
“That’s why you might see a deposit from a company you don’t recognize instead of the IRS,” finance expert Michael Ryan said.
When people use TurboTax or H&R Block, he said, taxpayers can choose to have their tax prep fees taken directly out of their refund: “Which, let’s be honest, feels super convenient in the moment. But you’re basically letting a middleman handle your money first. That middleman is usually TPG [Santa Barbara Tax Products Group].”
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What Is TPG Products?
Santa Barbara Tax Products Group (SBTPG), a subsidiary of Green Dot Corporation, was founded in 1991 to offer financial products tailored to taxpayers.
According to SBTPG’s website, the company’s Refund Transfer service allows tax preparation fees to be deducted from the taxpayer’s refund. Refunds are disbursed through direct deposit, prepaid Visa cards or cashier’s checks, with deposits reaching bank accounts within one to two business days after SBTPG receives the funds from the IRS.
“When you use certain services through tax software companies like TurboTax, you have to pay additional fees, and instead of paying those costs on the front end, taxpayers may opt to have them deducted from their refund amount,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “That decision will also result in a third-party payment service handing your refund, as they receive the refund first, take fees you owe out, then send the remaining amount to your banking account.”
How Can Taxpayers Avoid These Fees?
Beene said the process puts more demand on the taxpayer to ensure they know how many fees they owe, so they’ll know how much they actually receive back.
“If you want to avoid this, you can either choose not to use these software providers or—perhaps the better option—pay your tax preparation fees when filing,” Beene said, “so you have an exact amount you know you’ll be refunded without worrying about additional deductions.”
Why Does My Tax Return Include SBTPG?
SBTPG on a tax refund indicates that the taxpayer opted to have their tax preparation fees deducted from their refund. After the IRS releases the refund, SBTPG processes the payment, pays the tax preparer, and transfers the remaining balance to the taxpayer.
Kevin Thompson, finance expert and founder and CEO of 9i Capital Group, told Newsweek that Refund Transfers, which many taxpayers opt into, allow for the taxpayer to receive their refunds more quickly by borrowing against their expected refund. These loans are provided by third parties and are private in nature, with nothing to do with the IRS.
Why Is My Tax Return Lower Than Expected?
Taxpayers may receive a lower refund if tax preparation fees, advance loans or service charges were deducted. Additionally, delayed processing or account errors can impact the final refund amount.
TurboTax users have reported instances in which refunds were delayed or returned to the IRS because of address mismatches or banking issues, leading to further processing time.
Ryan said if your refund seems smaller than you expected, there could be a few things going on:
- Tax prep fees are higher than the taxpayer realized
- TPG has charged their own processing fee (about $40 to $45)
- Outstanding government debts, like student loans or child support, might get taken out, which will appear as additional fees
What Is The Deadline To File Taxes?
This year’s deadline to file federal income tax returns is Tuesday, April 15. Taxpayers can request an extension until October 15, though any taxes owed must be paid by April 15 to avoid penalties. State tax deadlines typically mirror the federal schedule.
For those with questions about their refund, tracking tools are available on the IRS’ “Where’s My Refund” page or SBTPG’s refund tracking portal.
