where is my state tax refund pa

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"Why is my state refund taxable? It feels like I'm being taxed on money I already paid taxes on!"

"What is the point of getting a state refund if I have to pay income tax on it?"

The premise behind these two common complaints is not true, but these complaints show one thing for certain: people resent having to report their state refund check as income. Sometimes after I explain it logically, I get one final comment that goes something like this: "Well, thanks for explaining it. I understand now, but I still don't like it and I plan to argue with you about it again next year."

"Refund" and "overpayment"

The states and the IRS use the words "refund" and "overpayment" interchangeably. The overpayment is what is taxable. For example, a taxpayer has a $2,000 state overpayment and gets a state refund of $2,000. For reasons described below, the $2,000 is taxable. Now let's say that the taxpayer elects to give $500 of his overpayment to the Wildlife Fund, or the Orphans' Fund, or the Firefighters' Fund. His refund will then be only $1,500. Even in this case, the $2,000 is still taxable even though he can deduct the $500 somewhere else on next year's return as a charitable contribution.

How the deduction works

  1. One deduction allowed on your itemized deductions is state income tax you pay for the year.
  2. Before you can prepare your state tax return, you have to first prepare your federal return.
  3. You cannot prepare your state return first and your federal return second.
  4. When you are preparing your federal return, you do not know yet how much state income tax you are going to pay for the year.
  5. So the IRS allows you to "guess" the amount for now. If you overguessed or underguessed, you make the adjustment on next year's return.

Stop for a moment. Doesn't this make sense so far?

  • But the IRS tells you exactly how to "guess" your state tax.
  • For most people, deduct the amount of state income tax withheld during the year.

    Here's the problem:

  • You had $3,000 state tax withheld during the year, so you deduct that as an itemized deduction.
  • Later when you prepare your state tax return, you find out that your state income tax was only $2,000, so you are going to get a refund of $1,000.
  • Your state income tax is only $2,000 for the year but you deducted $3,000.
  • To straighten this out, the IRS lets you report the $1,000 overpayment as income next year.
  • Still not convinced?

    If you still think that the overpayment is taxable or should be taxable, then try this scheme. It will not work, and that is the point. This extreme example will probably make it clear.

    1. A taxpayer gets an annual salary of $50,400.
    2. His gross each month is $4,200.00.
    3. He has $840.00 combined federal income and social security taxes withheld.
    4. This leaves a take-home of $3,360.
    5. He goes to his employer and says,
      1. "Each month I want you to hold out $3,359 state income tax so that I get a check for $1.00.
      2. I will borrow money from friends and family to live on during the year.
      3. At the end of the year, I will have a state tax deduction of $40,308. I won't owe any income tax.
      4. Then I'll file my state return and get a refund of $40,308.
      5. I'll pay my friends back and I will have saved over $10,000 in taxes.

    If you did not get a form 1099-G from the state reminding you of the amount of your overpayment, it does not matter. The overpayment is still taxable.

    What if I did not itemize last year?

    If you did not itemize last year, then you did not deduct any state tax. Therefore you do not have to "adjust" the amount you deducted. If you did not itemize last year, then your state refund or overpayment is not taxable this year.

    Hopefully it makes sense to you now. If this scenario were true, then wouldn't banks replace their billboards that say "The more you IRA, the less you IRS" with "Make a state tax refund loan with us and pay no taxes at all!"?

    Copyright © - 2006 Dutch Hawkins Mandeville, LA USA - All Rights Reserved

    where is my state tax refund pa

    Wheres my tax refund?

    Common reasons your State, Federal or IRS tax refund has not been issued:

    • Prior year tax liability.
    • An error on the return or flagged for review for other reasons.
    • Time allowed for processing the return. May take several weeks.
    • Your tax return has not been received.
    • If you or your spouse owe money to the IRS, federal, state, money for back child support, third party or money for overpayment or public assistance, the state may retain all or part of your refund. The state may satisfy certain types of debt including child support and some garnishments this way. If this happens, you will receive a letter stating the tax refund, the amount applied and to whom or what debt it was applied. Depending upon the amount owed, there could be no state or IRS tax refund due you.
    • State or IRS tax refund is being applied to your next year’s taxes.

    In Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, you are not required to file a State income tax return. You only need to file your Federal Income Tax Return with the IRS.

    The following may delay and/or reduce your state or IRS tax refund:

    It can take up to 90 days to process your return and issue your state or IRS tax refund, depending on when and how it was filed. If you e-filed your return, you should have your refund in 7 to 21 days.

    • A mailed paper return on or near April 15, may take considerably longer to process.
    • You have a new address.
    • You owe state taxes for other years
    • You owe state or IRS tax debts
    • The routing number and/or bank account numbers for your financial institution were incorrect on your return.
    • Errors on your state or IRS tax return

    Things you can do to speed up the state or IRS tax refund process:

    Request direct deposit. This is the fastest way to get your state taxes refund.

    where is my state tax refund pa

    People usually just wonder where is my tax refund after they file their taxes and while they impatiently wait for their tax refund money to arrive. A tax refund delay can be due to many reasons including unsuccessful submission of tax return, IRS overload, system breakdown, lost refund check, and tax refund fraud. It is a tax filer’s responsibility to properly follow up and check the tax refund status before more time is wasted for tax refund recovery.

    The question of where is my tax refund is rightfully justified if we know that 1) we overpaid taxes throughout the year consistent with our prior tax withholdings and tax returns and 2) our life situation has not changed drastically to reduce our expectation for a tax refund.

    Assuming that our assessment is accurate regarding our expectation for a big fat tax refund from Uncle Sam, what if the tax refund check is not received or deposited into our bank account by the average expected time following the submission of tax return? There comes a point when instead of wondering where is my tax refund money, we need to follow up with the IRS or State Franchise Tax Board to check income tax refund status and make sure we are not facing a tax refund fraud which would be a much more serious case than a check lost in the mail for example.

    The good news is that IRS has set up a federal tax refund status tracking tool to help tax filers check the status of federal income tax refund. Amazingly enough, the IRS called this secure online tool "where is my tax refund". By just providing your social security number or the IRS Taxpayer Identification Number (TIN), filing status whether single, married, etc., and the exact amount of your expected tax refund amount, you can check federal income tax refund status.

    Sometimes, identity thieves get ahead of the game and file your taxes for you so that they can get your tax refund. Since filing taxes no longer requires submission of hard copy documents which only you possess, it is easier for fraudsters to obtain and submit your soft information and receive your tax refund. In case you face a tax refund fraud, your submitted tax return will be rejected by the IRS as duplicate submission and no tax refund will be on its way to you, at least not until the IRS investigates and resolves the matter. Therefore, it is a good idea to check tax refund status two to four weeks after you file your tax return, depending on whether you mailed your tax return or filed online as well as how you instructed the IRS to send you the refund check either by mail or direct deposit. This way, you can find out quickly if any thing is wrong in your tax return filing and processing cycle and take timely actions to receive income tax refund sooner rather than later.