Yes, the federal refund may used to pay state taxes.
The Department of Treasury’s Bureau of the Fiscal Service (BFS) issues IRS tax refunds and Congress authorizes BFS to operate the Treasury Offset Program which collects certain debts.The BFS may use part or all of a tax refund to pay certain other debts such as state income tax obligations.
To determine if a debt is owed (other than federal tax), and whether an offset will occur, contact BFS' TOP call center at 800-304-3107 (for TTY/TDD help, call or 866-297-0517).