By Janie Ginocchio
In April 2019, we announced that Gov. Asa Hutchinson signed Act 774 of 2019, which required two direct deposit lines on the state income tax form so you could split your state refund into two bank accounts. This year, we facilitated the passage of similar legislation in Mississippi, which will go into effect next year. These policy efforts were in service to Southern’s Big Hairy Audacious Goal of empowering a million people to save.
With the end of 2020 in sight, it means tax season is just around the corner. Since tax refunds are often the largest lump sum payment families see all year, the economic fallout of the COVID-19 pandemic will force many families to use their refunds to catch up on bills or to get them through the next couple of months. But if you have breathing room in your budget, we strongly encourage you to save what you can out of your refunds, especially if you’re not in the habit of saving. No matter how much you direct to your savings account, it’s one step closer to building a nest egg that will be there when you need it.
In that spirit, we wanted to remind Arkansans there is now an easy option to save part of your state refund. By using the second direct deposit line on the tax form, you can easily stash away a few dollars for emergencies or for your New Year’s savings resolutions. You also have this option with your federal refund. The Consumer Financial Protection Bureau has a handy worksheet to help you make the most of your refund.
Since the Arkansas split refund option is still new, not a lot of people will know about it. Be sure to share this information with the people you know.