If you used the Refund Processing Service, you can pay your TurboTax state preparation fee with your federal refund but not your state tax bill. Note that a $40 processing fee is charged by the third-party bank that handles the transaction.
That's because the IRS and state tax departments each maintain separate tax collection systems. This means you can't apply your federal refund to pay off your state taxes, nor the other way around. Likewise, if you're filing more than one state return, you can't use the refund from one state to pay off another state.
You would have to pay your state tax, either using a voucher and mailing the payment in, or some states allow you to pay electronically from their websites. The payment voucher printing instructions will show if you select Check Payment on your state return
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