Want to Apply Your Tax Refund to Next Year’s Estimated Tax? It’s Possible

 

Expecting a refund and want to get ahead on your future taxes? While most taxpayers receive their refund in cash, you’re not required to go this route.  Instead, you can apply your tax refund to next year’s estimated taxes.

If you do choose to apply your refund to next year’s taxes, the refund amount will apply to the first estimated payment until all of the refund has been used.  Using your tax refund this way might help you reduce the burden of setting aside money to pay your estimated taxes.

Not sure you want to use all of this year’s refund for your estimated taxes?  You can always choose to partially apply your refund to next year.

How Do I Know If I Applied Part of 2019’s Refund to My 2020 Taxes?

Not sure if you applied last year’s tax refund to this year’s taxes? We can help. Use the instructions below to find out if you applied your refund to the next year (this year) and how you should report the amount when you do your current taxes.

Look at your 2019 federal return to see:

  • If you had an overpayment (refund) that was applied to this year’s estimated payments
  • How much, if any, that amount was

Report the amount on your 2020 Form 1040, Schedule 5, line 66. Don’t include in the amount:

  • Any overpayment you received as a refund
  • Any balance due from last year’s return that you paid in 2020

Related Topics

Related Resources

IRS Representation

Get the facts from H&R Block about IRS representation. Your representative can interact with the IRS and advocate for you when you have a tax issue.

State Returns and Federal Refunds

Will your federal refund be deposited if your state return is rejected? Learn more from the tax experts at H&R Block.

What are the current tax rates?

Find the current percentages for federal income tax rates, capital gains tax rates, Social Security tax rates and more from the tax experts at H&R Block.

Proposed Changes

In some cases, the IRS may propose changes to your tax return. Read the IRS definition and get more insight from the experts at H&R Block.