Why was my Federal taxes owed taken from my State return

[Wisco920]

Months ago I filed my returns and ended up owing $686 in Federal taxes, while receiving a return of $1596 from the state of Wisconsin. Of course the TurboTax page shows it as a net return of $910. No big deal, I’d get the $1500 return and just pay the $686 right away.

I finally get my state return a few months ago and it’s the $910. I was very confused and thought maybe they paid the federal, but didn’t think that was possible. Today I get a letter from the IRS stating I owe $686 + a 5 month late fee. I’ve been using TurboTax for years and never had any problems. I’m honestly just confused. I thought maybe I made a mistake on my taxes, but I didn’t receive anything in the mail regarding amendments and it’s such a leap for the missing number to be exactly the same if there were any offsets (which there shouldn’t have been).

[xmasbaby0]

You were confused and somehow expected that your state refund would pay your federal tax due.   That does not happen.    And....if you did not pay the federal tax due to the IRS by the April 15 deadline, that is why the IRS is charging interest on the amount you owe them.   

The federal and state treasuries are completely separate from each other.  

Your state tax due cannot be paid from a federal refund.

And….your federal tax due cannot be paid from a state refund.  

Neither refund can be used to pay the amount due to the other one.

If you owe tax due, you have to pay it yourself by the filing deadline on April 15, 2025.

 If you have federal tax due you can pay by mailing your payment with the 1040V voucher, (which has the address printed on it, having the payment taken out of a designated bank account, or you can pay directly on the IRS website. 

https://www.irs.gov/payments

https://ttlc.intuit.com/community/tax-payments/help/how-can-i-pay-my-federal-taxes/00/26212

https://ttlc.intuit.com/community/tax-payments/help/how-do-i-pay-my-irs-tax-due-with-a-check-or-mone... 

To apply for a payment plan with the IRS

Apply Online for a Payment Plan

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.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-rev...

WHAT IF I CANNOT PAY MY TAX DUE?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-payments/pay-taxes/L8aQBCpPO_US_en_U...

[xmasbaby0]

MY STATE REFUND WAS LESS THAN I EXPECTED

The state will send you a letter explaining the change.  TurboTax does not get any feedback from your state after your return is accepted, so no one at TT knows why your state refund was less.   Did you owe back taxes, child support, or student loans?  Traffic fines, etc.?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-rev...