What happens when you have a balance owed to the IRS with your tax return, but you’re supposed to get a refund from the state you live in?<\/p>\n
Can you simply apply the state refund to reduce the IRS balance owed?<\/p>\n
I get this question a lot, including yesterday.<\/p>\n
A client owed the IRS about $2,500, but they were scheduled to receive a refund of about $900 from the state they live in.<\/p>\n
In their mind, they only needed to submit a payment of $1,600 to the IRS, since they could just apply their state refund to their IRS balance owed.<\/p>\n
Unfortunately, this is not the way it works.<\/p>\n
The IRS and your state agency are not the same.<\/p>\n
It’s like trying to use a potential credit from your grocery at the gas station.<\/p>\n
You’ll need to submit your entire balance owed, while your refund will be processed by the separate agency and refunded once it is processed.<\/p>\n","protected":false},"excerpt":{"rendered":"
What happens when you have a balance owed to the IRS with your tax return, but you’re supposed to get a refund from the state you live in? Can you simply apply the state refund to reduce the IRS balance owed? I get this question a lot, including yesterday. A client owed the IRS about […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\n