No. You can't use your federal refund to pay your state tax bill. You have to pay NC what you owe them and you will get a refund of whatever is on Line 35a of your federal Form 1040. Maybe you are seeing a screen that is adding both your federal and state returns together - less your TurboTax fees. You have to deal with the IRS (federal) and your state's taxing authority separately. The are two completely separate entities and you can't pay your IRS through your state nor your state through the IRS.