Your state tax due cannot be paid from your federal refund.
It is not possible to pay your state tax due from your federal refund, nor is it possible to pay a federal tax due from a state refund. The federal and state treasuries are completely separate from each other. You may have seen a TurboTax summary of your federal and state amounts that confused you into thinking one was “paying” the other. It is not. The ONLY thing you can pay for from a federal refund is your TurboTax fees if you chose that option.
Since you did not pay your state tax due, you will now need to pay the tax along with any interest or penalties the state has assessed.
You must pay your state tax due using the state’s preferred method of receiving payment. For most states that will be by making a payment to the state’s own tax website, or by mailing a check or money order.
TurboTax does not pay your taxes owed. When you choose to pay taxes out of your refund, that is only for Federal taxes owed & is paid by the bank that handles the transaction. It does NOT State taxes owed. You would have need to pay your States taxes on their website or by direct debit or credit card.
PAY WITH RETURN. means exactly that. you need to pay your income taxes based on the instruction that Turbotax provides. that may be sending in your check with a voucher, some states now allow you to pay electronically through their website. for other states, you can specify direct debit (just like federal) but then you have to provide the correct account and routing numbers. Turbotax never pays the taxes. that's your responsibility.