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SFAB
New Member

State taxes owed deducted from federal return but I already paid state taxes separately?

I filed my state and federal taxes on 3/31/2021. For privacy, I’ll pick arbitrary dollar amounts to explain my situation.

 

When I filed my 2019 taxes, the return was direct deposited to bank “A”. This year I changed the direct deposit to bank “B”. My federal return was $5000 but I owed $700 to state “X” and $800 to state “Y”. I elected to pay the state taxes out of my bank account so the $700 and $800 were paid immediately when I filed. 

I received a federal return for only $3500. I assume it was not $5000 as the $1500 was deducted for what was owed to the 2 states. Since I already paid the state taxes, shouldn’t the federal refund still be the full amount? Another odd observation is that the federal refund went to bank “A” and is dated for 3/17/2021 (2 weeks before I filed). 

What happened?

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1 Reply
Cynthiad66
Expert Alumni

State taxes owed deducted from federal return but I already paid state taxes separately?

This simply cannot be correct.  You need to check with the IRS to clarify what is happening.  The federal refund is never adjusted for state taxes.  Two separate entities.  No way to get a refund before you file.  IRS should be sending a notice after you received the payments explaining the amounts.  Your years seem confused.

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