Do Cash Advances Affect Your Taxes? What to Know Before You File

When it’s time to file taxes each year, it’s natural to wonder which financial moves from last year might impact how much you could owe or get back after the tax deadline. If you’ve taken out a cash advance or used an earned wage access (EWA) app, you’ll need to understand how it might affect your taxable income. Not all cash apps work the same way. Some are loans, some are tied to paychecks — and only a few may affect your taxes.

This article breaks down how tax refund loans work, whether cash advances count as income, and why EarnIn users don’t have to report money received from Cash Out¹as taxable earnings.

Most importantly, be sure you consult a tax professional for guidance especially before making any changes to your tax filing. The information provided in this article is purely for educational purposes and should not be taken as expert advice.

What is a tax refund cash advance?

A tax refund cash advance is a short-term loan offered by tax-prep companies like TurboTax or H&R Block. These loans give you part of your expected refund upfront, often just days after filing.

Here are key details you should know:

Loan amounts typically range from $250 to $4,000
Many come with 0% interest, but some may involve processing fees
The loan is repaid automatically when your Internal Revenue Service (IRS) refund arrives

It’s important to note that a tax refund loan is not considered taxable income because it is a personal loan, not earnings. For that reason, you don’t need to report it as income when you file your taxes.

Are regular cash advances taxable?

Most cash advances are loans, which means they are generally not considered taxable income. That includes:

Because these funds must be repaid, they aren’t treated as income by the IRS. The one exception is if a lender forgives or cancels the debt. In that case, the forgiven amount may be considered taxable. Unless that happens, your cash advances aren’t likely to change your tax return.

Do earned wage access apps like EarnIn affect your taxes?

EarnIn works differently from loans or advances. The Cash Out¹ tool lets you access wages you’ve already earned, before your regular payday.Because this is money you've already worked for, it is not taxable income.

There are several ways EarnIn makes life easier during tax season, including:

No interest or mandatory fees for using Cash Out¹
Flexible repayment, automatically deducted on payday
An alternative to costly refund loans or payday loans

This distinction matters: EarnIn is not adding new money or debt, so you don’t need to worry about it complicating your tax filing.

3 things to know before filing if you’ve used a cash app

These are the three most important things to understand about how using a cash app may affect your taxes.

1. Loans don’t count as income

Cash advance loans are not income. You don’t need to report them on your tax return unless a lender forgives the debt.

2. Watch out for fees, not taxes

While payday loans or credit card advances often come with high interest and fees, those costs are unlikely to affect your taxes, nor are they tax-deductible.

3. Early Wage Access (EWA) is safe

EarnIn and other EWA tools simply let you access your earned wages before your scheduled payday. Since it’s money you’ve already earned, there’s no additional IRS reporting required because you’ll already be reporting it as income from your employer.

Safer alternatives to tax refund loans and payday advances

EarnIn – access your pay early without tax complications

With EarnIn's Cash Out¹, you can get up to $150/day, with a maximum of $750 per pay period. There’s no interest, no mandatory fees, and repayment happens automatically on payday.

Adjust your withholdings for future years

If you usually receive a large refund, consider updating your withholdings. This way, more of your money arrives in each paycheck, reducing the need for refund loans.

Build a small emergency buffer

Over time, setting aside even small amounts, like $20 to $50 per week, can help. Pairing EWA apps with emergency savings gives you more options and less reliance on costly advances.

Keep your taxes simple and your cash flow steady

Most cash apps won’t affect your taxes, but be sure to consult a tax professional as you start preparing for tax season. If you need money quickly and don't want to dip into your refund, EarnIn’s Cash Out¹ feature provides a way to access wages you’ve already earned, interest-free, without adding complexity at filing time.

With some planning, you can skip the stress and keep your money working for you. Explore more tips to help you save on taxes here.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

This Blog was sponsored by EarnIn. While the author received compensation, the information shared is grounded in independent research and intended to provide helpful and accurate guidance to readers.

EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.

¹
A pay period is the time between your paychecks, such as weekly, biweekly, or monthly. EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out Maxes section of our Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out.

EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed may not be available at all times and/or to all customers; see the Lightning Speed Fee Table and Cash Out User Agreement for details and eligibility requirements. Tips are optional and do not affect the quality or availability of services.