Do I need a federal or state extension if I am due a refund?

[gpattwx]

I will not be able to prepare and submit my taxes next year until after April 15th, most likely not until May. I am expecting a refund from both the state and federal income taxes. From what I can find, I can simply just file my federal income tax return without needing an extension without any penalty against my refund? Is this the same for New York State income state taxes? If I file both the NYS and Federal income taxes in the month of May and I am getting a refund from both the State and Federal taxes, do I need an extension and if not, will there be any penalty which would decrease the amount of my refund for either? For example, if I am expecting a refund of $1500 from the Federal taxes and a refund of $500 from the NY State taxes, will I still see the $1500 from the Federal and $500 from NYS if I file my taxes in May or June?

[DoninGA]

If you are receiving tax refunds for your federal and state tax returns there is no need to file an extension.  There are no penalties for filing after the due date of the tax return, federal or state, if filing for a tax refund.

[Mike9241]

please note that extensions and any balance due are due by the original due date of the returns. since you are due a refund no extension is required. However, it's always a good idea to file an extension even if you think you are due a refund. Should the IRS find an error where you now owe the penalty for late filing is 4.5% of the balance due per month for the first 5 months. then it drops to zero. there is also a late payment penalty of .5% per month and interest. If you file more than 60 days late and owe the minimum penalty is about $500 or the unpaid tax whichever is less

a timely filed extension generally gives you until 10/15 to file and there is no late filing penalty unless you owe and file after 10/15.

you don't have to use Turbotax for the extension. you can download the current year form 4868 from the iRS website and there are other websites that allow e-filing an extension for free.  If you have a state income tax, the laws vary. Some require an extension and payment if you owe. others only require payment and honor a timely filed federal extension. 

[gpattwx]

Thank you for the extensive explanation. I am pretty confident that I would not owe taxes as I generally have never owed since I also do additional withholdings throughout the year.

Is there a separate form I would need to file an extension for NYS or would the Federal Form 4868 be sufficient if I send to the given address on the instructions? Noting that even though I am posting this in July, I am speaking about next tax season so I would need to wait for the updated tax form for next year as only this year's is available on the IRS website. All my taxes up to this point have been filed with no issues. It is just next year whereas I would not be able to file until most likely May but fully expect a refund based upon my tax liability and payments I make throughout the year.

In reality, I am just looking to hope that when I get the refund next year, there will not be a penalty from the Federal or State (NYS) income tax filing. So, neither will take a percentage from my refund regardless of if I file a Form 4868 and any other State Form or not? I understand if I OWE, there would be a penalty...but since I expect a refund, I will still get the full expected refund with no percentage taken off.

[fanfare]

there is no penalty for filing late if a refund is coming to you, unless you accrued the refund only after Tax Day April 15th..

@gpattwx 

[cparke3]

You should file all applicable extensions if you can.

While you may not need the extension if you are due a refund, you lose the right to make most elections on your return when you late file if you didn't file an extension by the regular due date, or you still don't file by the extended due date.  Some states also impose minimum late-filing penalties regardless of tax amount due (ex: minimum $50/month), so filing the extensions could still save you penalties.

[dieggzy]

I did not file for an extension and filed very late .  The tax returns were accepted right away, each with a refund calculated; federal and state.  I assumed there was a penalty, but now I've just learned that that only applies to tax liability, not to refunds. Which totally makes sense . However,  my reasoning behind being penalized, is that my actual return was a lot less than expected ,  short by roughly 20 percent.  So when I did the math (of course using the 5% rule before i realizing it doesn't apply to refunds), I still got to within $4.00 of the actual return.  It's a refund so that math is all wrong, it doesn't apply. If there are taxes on digital tax ervices or products it only comes to about 2% of my refund. Is it possible I lost some of my rights to claim certain items on my return as a penalty for being late?  What i'd really like, is just to see the breakdown, so I can understand.  The only thing i know for sure  right now, is i won't be filing late again, but it would be great if someone shed some light on this.  

[VolvoGirl]

Are you saying the IRS sent less refund than you were expecting, less than your 1040 line 35a?    If they IRS or state adjusted your return they will send you a letter explaining it.  Federal and state refunds come at different times from different places but at the end Turbo Tax shows you the net refund or tax due of federal and state combined.  That is only for your own info.  You should get the full refund refund from each one.

Or did you  select to have the  Turbo Tax fees deducted from your refund?  There is an extra $40 (or 45 or 50) Refund Processing Service charge.

Otherwise if your 1040 tax return shows less on line 35a than you were expecting before you need to check each line to find what changed you don't agree with.  Was there a penalty on line 38?  You can even pay a penalty if you are getting a refund for not paying in evenly during the year.  That is not the same penalty as filing late or owing too much.    

[cparke3]

It really depends on your tax situation and the contents of your return.  In a previous post, I was referring to certain non-revocable taxpayer elections that can only be made on a timely-filed original return.  Normally, these must be made by the due date of the return (including extensions).  A taxpayer who misses the filing deadline for a regulatory election may request a letter ruling from the IRS granting an extension of time to make the election under Regs. Sec. 301.9100-3. The IRS will grant relief only for failure to timely file a regulatory election, not a statutory election, under this provision. Relief will be granted if the taxpayer provides evidence that establishes to the satisfaction of the IRS that the taxpayer acted reasonably and in good faith, and the grant of relief will not prejudice the interests of the government. That is a difficult and expensive process, and good luck meeting such criteria if you're doing it to get a higher refund.

[xmasbaby0]

@dieggzy

You say that you "filed very late" but did not specify how late your return was.   If you are getting a refund, you have three years to file the return and receive your refund and there is no penalty for filing late and no penalty for not having an extension.  Late penalties are incurred for filing returns late with tax due.  If your refund was reduced it was reduced for some other reason and you should receive a letter from the IRS explaining why the refund is less.

MY REFUND WAS LESS THAN I EXPECTED

https://ttlc.intuit.com/community/refunds/help/why-is-my-direct-deposited-refund-or-check-lower-than...

There can be a number of reasons why your refund was less than the amount you expected. First of all, look carefully at your actual tax returns. Next——check the IRS refund site https://www.irs.gov/refunds to see what the IRS says they issued for your refund.  Sometimes the IRS reduces your refund. If the IRS reduced your refund they will send you a letter in several weeks.

There is sometimes confusion about the amount of refund to expect when users misinterpret the “summary” they saw in TurboTax. The amount of your refund is on your tax return.  Federal refund is on line 35a on Form 1040  State tax forms are all different so we cannot tell you what line to look at on your state form.  BUT it is important to actually LOOK at your tax return forms yourself and see the amounts of your tax refunds and/or tax due.  A lot of confusion would be avoided by doing that.

Be aware also that your Federal refund and state refund do NOT come together.  Federal and state tax returns are processed by two completely separate entities.  There is no rule as to which one will come first,

It is also possible that your state reduced your refund for debts owed in your state—if the state reduced your state refund you will receive a letter from the state.

Did you choose to have TT fees deducted from your Federal refund?  (Remember that if you did that, you also agreed to an extra refund processing fee of $40 or $45  in CA)

How can I see my TurboTax  fees?  

https://ttlc.intuit.com/turbotax-support/en-us/help-article/intuit-account-billing/review-fees-turbo...

 refund offset.

https://www.irs.gov/uac/tax-refund-offsets-pay-unpaid-debts

 IRS Treasury Offset Program Call Center at 1-800-304-3107

 https://www.irs.gov/uac/tax-refund-offsets-pay-unpaid-debts

https://ttlc.intuit.com/community/refunds/help/what-is-a-refund-offset/00/26301

Reduced Refund      https://www.irs.gov/taxtopics/tc203

 NOTE: You can contact the IRS Treasury Offset Program Call Center at 1-800-304-3107 to ask if they have an offset for you on file. TurboTax would not have that information.

https://turbotax.intuit.com/tax-tips/tax-payments/who-can-garnish-an-income-tax-refund/L7cPPzDyc