2025 Taxes: State refund goes up about $200 after adding OT hours???

[ambermac82]

I enter my taxes in Turbotax and another tax site to verify amount of return. Gave both site the same information and got similar results until after I added the overtime information (information is the same) but my state refund went from 600 to 800. The other site there was only the increase on federal return (federal return matches on both sites).

Advise? I prefer Turbotax but may go with other site to be safe.

[MaryK4]

Can you clarify which state?  @ambermac82 

[ambermac82]

Oregon

[SusanY1]

It makes sense to me that the Oregon refund would go up after entering tips, because Oregon starts their calculations with your Adjusted Gross Income (AGI) and that is reduce with this deduction. 

The tip deduction is an "above-the-line" deduction that reduces this number, and then feeds into the state numbers. 

Sometimes, in TurboTax, the refund meters will be out-of-synch until some follow-up questions are answered so while they help gauge what is happening as you go, it's the final number after review that matters the most. 

 

[ambermac82]

It is not tips (no tips) but overtime, once I enter the overtime both federal and Oregon refunds go up. Is this correct? 

I have Oregon Kicker about 340

reg Oregon about 260

after overtime there is 200

total for 800 back from Oregon

[SusanY1 · Accepted solution]

Yes, this is correct.  When you deduct the overtime, your federal taxable income and your federal adjusted gross income (AGI) go down. 

Your Oregon return starts with a "base"  number equal to your federal AGI.  Since that goes down with the overtime deduction, then your taxable Oregon income also goes down (so your refund will go up.)