Received unexpectedly low NY refund

[Carey99]

• I elected to have my old federal taxes be paid by my New York refund. This is evidenced by the small refund that I actually received by New York state. Then I was asked to pay my federal taxes by credit card so I did not think that TurboTax actually used my refund to pay my federal taxes so I went along and paid by credit card. Then I only received a third of my refund which would be the amount left if part of my refund was given to pay my Federal taxes. What is going on and what am I supposed to do about this gross under payment? And please don't tell me I misunderstood anything.

[DoninGA]

You will receive a letter from NY state explaining what they changed on your state return which reduced the state tax refund.

A state tax refund for the current tax year can Never be used to pay the current tax year federal taxes owed.

[xmasbaby0]

"please don't tell me I misunderstood..."   

Sorry---that is what happened --- you misunderstood.

The “summary” given to you by TurboTax must have confused you.  That summary just nets out the difference between a refund you are getting and an amount you owe.   Or it adds two refunds or tax “due” amounts together.

The federal and state treasuries are completely separate from each other.  

Your state tax due cannot be paid from a federal refund.

And….your federal tax due cannot be paid from a state refund.  

Neither refund can be used to pay the amount due to the other one.

If you owe tax due, you have to pay it yourself by the filing deadline on April 15, 2024.

 If you have federal tax due you can pay by mailing your payment with the 1040V voucher, (which has the address printed on it, having the payment taken out of a designated bank account, or you can pay directly on the IRS website. 

https://www.irs.gov/payments

https://ttlc.intuit.com/community/tax-payments/help/how-can-i-pay-my-federal-taxes/00/26212

https://ttlc.intuit.com/community/tax-payments/help/how-do-i-pay-my-irs-tax-due-with-a-check-or-mone... 

To apply for a payment plan with the IRS

Apply Online for a Payment Plan

You must pay your state tax due using the state’s preferred method of receiving payment.  For most states that will be by making a payment to the state’s own tax website, or by mailing a check or money order.

https://ttlc.intuit.com/questions/1901670-how-do-i-contact-my-state-department-of-revenue

And....if NY reduced your state refund, the state will be sending you a letter to explain why the state reduced your NY refund.    

 TurboTax does not get any feedback from your state after your return is accepted, so no one at TT knows why your state refund was less.   Did you owe back taxes, child support, or student loans?  Traffic fines, etc.?  Or perhaps the state just caught some mistake you made on the state return and corrected it by reducing your refund.

https://ttlc.intuit.com/community/state-taxes/help/how-do-i-contact-my-state-department-of-revenue/0...

[Carey99]

• I received no such letter from New York state. I am telling you that I did not misunderstand in advance of any reply because I have now read at least five other posts indicating the same exact message from TurboTax and getting an unexpectedly low refund. But of course TurboTax will not take any responsibility and we will all have to figure this out for ourselves. Hopefully you will not be sued for thousands of dollars that you have apparently stolen from your users.

[rjs]

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@Carey99 wrote:
I have now read at least five other posts indicating the same exact message from TurboTax and getting an unexpectedly low refund.

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You did not mention a message from TurboTax before. What is the entire exact message that you received from TurboTax, word for word? Was it an email or a message in the TurboTax software?

Can you post links to some of the other posts that say they got "the same exact message from TurboTax"?

Was the federal tax that you paid an amount due on your 2023 federal tax return, or was it a past-due amount from a previous year?

TurboTax never gets any part of your state refund. TurboTax never pays your tax, either federal or state. There are only two ways that TurboTax can arrange the payment of your federal tax. One way is to indicate on your tax return that you want the IRS to withdraw the payment from your bank account by direct debit. The other way is to have a third-party credit card service charge the payment to your credit card. In either case, TurboTax never handles the money.

When did you receive your New York refund? It might take a few weeks for them to send the letter. If it's been more than a few weeks and you still have not received a letter, call the New York State Department of Taxation and Finance at 518-457-5181 and ask them why your refund was reduced.