Three Tax Years, One Season: Prior-Year Refund Settlement for 2027
November 7, 2026
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Tax season 2027 hasn’t started yet, and that’s exactly why this is worth reading now.
Every January, the IRS opens an e-file window that most offices use a third of. And this season, in all three of those years, eligible clients can pay authorized fees from their refunds instead of upfront, if your software offers prior-year Refund Settlement.
Three tax years are open at once
The IRS Modernized e-File system accepts a rolling three-year set:
As subsequent tax years are added to the system, MeF will accept the current tax year and two prior tax years.
That’s the IRS’s own wording on its Benefits of 1040 Modernized e-File page. For the 2027 season, it means tax years 2026, 2025, and 2024 are open for e-file.
The set moves forward every year, so add a note to your calendar. Tax year 2024 is in this season’s set; next season it won’t be, while its April 2028 refund deadline is still weeks away. A return you could transmit electronically this year would become a paper return filed at the narrow end of the window, right when your office is busiest. If a client is sitting on 2024, this is the season to look at it.
Three questions, not one
Whether a back year is worth opening depends on three separate tests, and a yes to one is not a yes to the others.
Can it be e-filed? That’s the window above. A question about transmission, nothing else.
Is a refund still claimable? That’s the statute. The IRS gives you “3 years from the date you filed your federal income tax return, or 2 years from the date you paid the tax,” whichever is later (Time you can claim a credit or refund). For a return that was never filed, the refund is generally limited to tax paid in the three years before you file, so in practice the deadline is about three years from the original due date (mid-April 2028 for tax year 2024). There are exceptions, and being inside the window doesn’t mean a refund is owed; many back years still produce a balance due.
Is there a refund to settle against? A Refund Settlement requires one. If the client owes on a year, the option won’t appear in your software. Eligibility details are on the prior-year Refund Settlement page.
Answer all three before you quote the client.
What’s new for 2027
Samuel Gonell, Refundo’s Chief Technology Officer:
Through our integration with CrossLink, Refund Settlement is now available for the current tax year plus the two prior years, whereas previously support was limited to the current year only. For example, if a preparer is working on a 2026 return, they can use Refund Settlement for that year as well as for 2025 and 2024 returns.
Three things follow from that, and they’re the ones preparers ask about first:
- Each year is its own Refund Settlement, settling from its own federal and/or state refund.
- One opt-in step. When you enroll with Refundo in your software, opt in to the Prior-Year Refund Settlement program.
- Refund Settlement and all disbursement options, including RPIN, are available on prior-year returns for both federal and state refunds. Availability may vary by software provider.
We launched it first with CrossLink. Other software providers may offer it at their discretion; check with your provider to confirm availability.
We asked Zac Crites, Senior Marketing Manager at CrossLink, who it helps: “You have a lot of taxpayers out there that aren’t able to pay for a current-year return. So if they have past-due obligations, then this is a solution for that.” (A Refund Settlement requires a refund. It does not pay past-due tax, and past-due debts can reduce a refund through offsets.)
Emilio Jiménez, COO at Refundo, with Zac Crites, Senior Marketing Manager at CrossLink, in New York City. Recorded August 2026. Remarks are the speakers’ own; current program terms, eligibility requirements, and fees are set out in the disclosures below.
What it costs
$44.95 per tax year. Each year filed is its own Refund Settlement, so the fee applies once per year. A second Refund Settlement within the same year, a state refund after a federal one, is $12.
That's the Refund Settlement fee, separate from your own preparation fees. RPIN cash pickup carries a $7 fee per withdrawal, shown in the app; codes are up to $800 each, and the Refundo App is required.
A Refund Settlement is optional and isn’t required to e-file a return or receive a refund. When an eligible refund is funded, authorized fees are deducted and the remaining balance is disbursed to the taxpayer by direct deposit, a check printed in your office, a prepaid card, or RPIN cash pickup at a participating ATM. Payment depends on the refund being funded, and refunds may be delayed, reduced, or offset.
Working the clients you already have
Filter your database for anyone whose last return with you was tax year 2023 or 2024 and who hasn't come back. Their open years line up with this season's window. You can contact past clients to offer to prepare those open years, within the limits of IRC §7216. Using their return information for anything else, including marketing other products or services, needs the client’s written consent, and calls or texts need the consent the TCPA requires.
Four things to get right:
- Get authorized first. A signed Form 2848 or Form 8821 listing the specific tax years, before you pull anything through the Transcript Delivery System.
- Treat transcripts as a starting point. The Wage and Income Transcript covers “the current and nine prior tax years” (IRS), but it reconstructs reported income only; it doesn’t replace the client interview or source documents, and W-2 transcript data excludes state and local tax information.
- Check credits year by year. Prior year returns follow the rules in place for that tax year, not this one. Before you quote a refund on a 2024 or 2025 return, confirm which credits the client qualified for in that specific year using that year's forms and instructions. A client filing three years at once can qualify for a credit in one year and not the next, and the refund, and the Refund Settlement behind it, moves with that.
- Be straight about the money. Your prep fee per year, plus $44.95 per year, out of each refund, and say plainly that it depends on the refund being funded, and that the client may owe you directly if it isn't.
One more argument for raising it now rather than in February: the IRS issued 3,157,055 non-filer notices in FY 2025, up from 1,679,141 the year before (TIGTA, Report No. 2026-3S0-045, Trends in Compliance Activities Through Fiscal Year 2025, August 26, 2026). Some of those letters are going to people already in your file.
Getting set up
Enrollment is open. If you already offer Refund Settlement, you're ready once you opt in to the Prior-Year program. See the prior-year Refund Settlement page for eligible years, fees, and the full FAQ.
Have questions? Reach out anytime.
- Phone: (908) 445-5544
- Chat: Available on your dashboard and at refundo.com
Amplify your success this tax season. 💜
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Disclosures:
Refund Settlement: Refundo is a financial technology company, not a bank. Optional bank deposit product — not a loan — provided by our partner banks. The bank providing each Refund Settlement is named on the application and at refundo.com/disclosures. E-filing required. Processing fee of $44.95 withheld from refund upon IRS or state funding; a $12 fee applies to each additional funded return for the same tax year, such as a state return; remaining balance disbursed to you, net of tax preparation and other applicable fees. A Refund Settlement is not required to e-file or to receive a refund. Terms and conditions are subject to change as permitted by your agreement and applicable law.
Prior-Year Refund Settlement: Refundo is a financial technology company, not a bank. Optional bank deposit product, not a loan, provided by our partner banks, for e-filed returns for up to two prior tax years. The bank providing each Refund Settlement is named on the application and at refundo.com/disclosures. E-filing required. Processing fee of $44.95 per tax year withheld from the refund upon IRS or state funding; a fee of $12 applies to each additional funded return for the same tax year, such as a state return; remaining balance disbursed to you, net of tax preparation and other applicable fees. Prior-year returns may take longer for the IRS to process, and refunds may be reduced or withheld for past-due debts (offsets) or other IRS adjustments. Fees are deducted only from a refund deposited to the settlement account; if no refund is issued, you may still owe your preparer directly. A refund generally can be claimed only within three years of the return’s original due date. A Refund Settlement is not required to e-file or to receive a refund; you may instead pay your preparation fees directly and receive your refund from the IRS. Refund timing is set by the IRS; this product does not speed up your refund. Terms and conditions are subject to change as permitted by your agreement and applicable law.
RPIN (Cash Pickup): Optional cash disbursement method powered by ReadyCode from NCR Atleos. Refundo is a financial technology company, not a bank. Banking services provided by our partner banks; the bank holding your funds is named in the Refundo App and at refundo.com/disclosures. Requires the Refundo App. A $7.00 service fee applies to each ATM transaction and is deducted from the account balance; the fee is disclosed and authorized in the Refundo app before each cash code is issued. Each RPIN cash code is single-use, is tied to the phone number registered to the account, and is issued for a fixed amount of up to $800 that cannot be changed at the ATM. Participating ATMs are owned and operated by independent third parties and establish their own per-withdrawal dispensing limits, which may be lower than the maximum code amount; withdrawing an amount greater than a single ATM will dispense requires additional codes and additional transactions, each incurring a separate $7.00 fee. Participating ATMs do not impose a surcharge on RPIN withdrawals. Cash codes expire if not redeemed within the period disclosed in the app; funds associated with an expired or canceled code are returned to the available balance. Cash codes should be safeguarded like cash. A completed ATM cash withdrawal is final and cannot be reversed. Not a loan or credit product. Not required to e-file or to receive a refund. Cash access is not guaranteed at any specific ATM and is subject to ATM operating status, cash availability, and retailer hours. Terms and conditions are subject to change as permitted by your agreement and applicable law.
This article is general information for tax professionals and is not tax or legal advice. Tax law and IRS procedures change; verify current rules for each tax year before relying on them.
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