I filed my taxes and gave permission to have the refund pay off the state tax due but I received a letter that the payment did not make and was charged with a penalty?

[rmbibber]

My federal tax return should have been applied to pay the state tax return. The letter from the Department of Revenue is rejecting the payment and are charging a high fee for this. Can I dispute the penalty? Why am I finding out much later after filing months ago now that I have relocated to a new state. That's rather suspicious that I did not receive notice when I was living in East Boston.

[VolvoGirl]

No, you misunderstood. That's not possible. You might have had the Turbo Tax fees deducted from your refund.

The state tax can not be deducted from the federal refund. NEVER. You can only have the Turbo Tax fees deducted. You will still get the full federal refund minus any fees you had deducted. Turbo Tax just shows you a screen at the end showing the Net amount of federal and state combined. But it is just for your own info.

You do still have to pay the state yourself separately. See,
https://ttlc.intuit.com/community/state-taxes/help/can-i-pay-my-state-taxes-from-my-federal-refund/0...

Check the printout or PDF of your return; look for the state cover sheet with the Turbo Tax logo. If you owed tax, it will show the payment information and how/when you decided to pay. Read the state payment instructions carefully since most states cannot be paid from within the TT system and requires additional steps.
https://ttlc.intuit.com/community/refunds/help/what-are-my-options-for-getting-my-state-refund-or-fo...

Your only proof of payment is your bank statement or credit card showing the payment coming out. Turbo Tax only passes your bank account number to the state for the state to take it out of your account. But most states do not let you pay by Direct Debit so you have to mail in a check or go directly to the state's website to pay.