@ eddyvt wrote:
so during my review it say's I'll get an X amount of federal refund but the amount is as if the refund has also paid for the owed state taxes. (Example : 800 federal refund and -500 state taxes owed = 300 federal refund)
does that mean that my state taxes will be paid via turbotax using my federal refund or will i still have to pay my owed taxes when i efile?
It is not possible to pay any state taxes due out of a Federal refund. You have to pay all state taxes owed yourself by whatever method your state accepts. The ONLY thing that can be paid out of a Federal refund is the TurboTax preparation fees.
The screen you are referring to is confusing, and we have complained to TurboTax about it many times, and apparently they have not made it more straightforward. Each year many people ask this same question you did.
Using the figures you provided in your example, the screen is saying you have $800 in Federal refund and owe $500 in State taxes, and just informing you that you would have a net result of $300 in your pocket when all is said and done; i.e., after you receive the Federal refund AND after you have paid your state taxes yourself. Obviously that screen does not make that clear and is confusing to many. I don't see any advantage of them even summing it like that, since it's so confusing. I think they should just show the first 2 figures; i.e., the Federal refund and the state taxes owed.
Review the wording on that screen again carefully; I believe it's very subtle. I have no way to view that screen, but I don't believe they call the net $300 a "Federal" refund like you labeled in your example. If it does, then it shouldn't. They may just refer to as "refund" or "net" or "total", but I have no way to check. But anyway, it's easy to misinterpret it that way, and it confuses many folks. In any case, it is not saying that the state taxes will be paid out of a Federal refund, which cannot be done. The IRS and state tax agency are 2 separate entities, each doing their own thing. And TurboTax does not pay the state taxes for you, but for many states they provide a screen for you to make the payment through the program. When you go through the filing process, it should tell you what your tax payment options are for your particular state. You must pay the state taxes owed yourself, using whatever method your state allows.
See these 2 FAQs:
FAQ: Can I pay my state taxes from my Federal refund?
https://ttlc.intuit.com/community/state-taxes/help/can-i-pay-my-state-taxes-from-my-federal-refund/0...
FAQ: What are my options for getting my state refund OR for paying any state taxes I owe?
https://ttlc.intuit.com/community/refunds/help/what-are-my-options-for-getting-my-state-refund-or-fo...
