The federal refund is deducting what i owe for state. Is federal automatically paying those taxes?

[AlanT · Accepted solution]

No. You cannot pay your State taxes from your Federal refund because the IRS and state tax departments each maintain their own, separate tax collection systems.

This means you can't apply your federal refund to pay off your state taxes, nor the other way around.

If you're using the Refund Processing Service, you can pay your TurboTax state preparation fee with your federal refund – just not your state tax bill.