Filing taxes might be a yearly occurrence, but it can still be a little confusing. If you’re waiting for a refund from both your federal and state taxes, you might wonder why only one has turned up.
Don’t worry, there probably isn’t an issue with your refund. State and federal taxes are processed by two different governing bodies, and refunds are issued separately.
So, just because one isn’t here yet, it doesn’t mean there’s a problem.
To find out why state and federal tax refunds run on different schedules, take a look at our guide.
Do Federal And State Tax Refunds Come At The Same Time?
Federal and state tax refunds come separately because they are provided by two different governing bodies.
Federal tax is collected and refunded by the federal government, while state tax is determined by where in the United States you live.
Because of this, there will typically be different processing times, meaning your refund won’t always arrive on the same day.
The IRS attempts to process all tax returns within 21 days of filing. The process can potentially be sped up by filing online, and requesting a direct deposit.
However, backlogs in the system can lead to refunds taking significantly longer to be processed.
Your federal refund might further be delayed if you’re claiming Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC).
These refunds have to be held for several additional weeks while checks are performed.
State tax refunds are the responsibility of the individual state, and the processing times can vary.
Overall, expect a state refund to be released within roughly 30 days of the original filing.
However, for a personalized and more accurate estimate, we recommend visiting the state’s tax website.
Why Do State And Federal Tax Refunds Come Separately?
When you’re waiting on your tax refund, you want it to be with you as soon as possible.
However, if you’re expecting both a state and federal refund, then you might be in for a little wait.
And just because one is on the way, it doesn’t mean the other is.
The tax system in the United States of America is layered. Federal, state, and even local government taxes operate along similar lines, but often apply significantly different rates.
Federal taxes are collected and processed by the federal government, and the progressive rates are the same for all people in the United States, no matter which state they live in.
Federal income tax uses a progressive rate, in which different levels of income fall into different tax brackets.
Lower levels of income – an amount up to a certain point – will be subject to a lower tax rate.
Income above this point will fall into a different bracket, so different percentages of your income are charged at a higher and lower rate.
But the separate states are allowed to offer their own tax system. For some states, this means no income tax at all.
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the nine states which don’t have state level income tax.
However, anyone living in these states still has to pay federal income tax. And while they might not have state income tax, the state government might raise taxes in other areas, to cover the deficit.
Taxes in other states often work in a similar progressive manner to federal taxes. In these states, different percentages of income are subjected to different rates.
Hawaii, with 12 brackets, has the most of any individual state. However, other states apply a flat rate, in which all income is taxed at the same level.
Because of these differences, tax returns have to be processed at a federal level, and a state level. The result of all this is that you receive your refunds separately.
Can State And Federal Tax Returns Be Filed Separately?
Yes, state and federal taxes can be filed separately. If you choose to e-file, your federal taxes might need to be filed before the state return.
You may need to wait until your e-file federal taxes have been accepted, and are no longer pending, before you can file your state tax return.
However, states will often work alongside the IRS to allow taxpayers to file both at the same time.
If you choose to file by mail instead, you are able to file the state tax return before the federal tax return.
There is more flexibility if you file via mail, but processing times tend to be slower.
Checking The Status Of Your Tax Return
If you’re expecting a refund from your federal tax filing, then you can check the status via the IRS Where’s My Refund? tracker.
This updates nightly, and can tell you the general status of your refund.
Unless directed to by the tracker, don’t call the IRS to find out what’s happening. They can’t research filings until a particular amount of time has passed.
Some states also offer their own individual tax refund checker. Visit your state’s website to find out if they have a tracker, and what the expected processing time is.
Waiting for a tax refund can feel like a long time, particularly if you’re expecting a refund from both your state and federal filing.
While there’s no way of speeding a return up once it’s been sent, there are a few things you can do.
First, e-filing is the quickest method. Tax returns filed online can be processed quicker, and you don’t have to rely on the mail service for delivery.
Second, ask for a direct deposit refund, rather than a mailed refund. This can shorten the wait time significantly.
Finally, be sure to double-check for any mistakes or missed sections on your forms. Even minor errors can slow the entire process down.
Federal and state tax returns are controlled by different government bodies, so don’t expect your refunds to turn up at the same time.
While the IRS aims to get all federal refunds sent within 21 days, state governments offer varying processing times.