Tens of millions of Americans have to file federal tax returns, and many of them expect to get refunds from the IRS. Yet in all but a small handful of states, taxpayers also have to file returns with state tax authorities. State tax refunds can add to your total haul at tax time, but the rules governing when you'll actually receive those state tax refunds can vary greatly from state to state. Below, we'll take a look at why you might get a state tax refund and what timing you can expect once you do file.
Why you might get a state tax refund
In general, states that have income taxes generally get the bulk of their tax revenue through withholding from workers' paychecks. Just as you'll see with federal taxes, most employers have to withhold money toward your state income tax liability. Although you have the ability to modify your withholding in order to match it more precisely to your actual tax liability, most workers leave the default rules alone, and that can often result in a refund.
The other situation in which a refund is likely is if you have tax benefits that aren't related to your job. For instance, some states have their own versions of federal tax breaks like the earned income credit, child and dependent care credit, or educational credits. Since your withholding at work typically can't account for that, you'll usually have too much money withheld once you claim that credit, resulting in a refund.
When will you get your refund from the state?
Different states have different guidelines when it comes to how quickly you can expect a refund. However, there are some general rules that you can count on wherever you live. In general, using electronic filing results in a much faster refund than if you use paper filing. As a result, it almost always makes sense to use e-filing whenever it's available. Moreover, if you're already planning to file electronically for your federal return, some tax packages allow you to make a state filing electronically at no additional charge.
Below, we'll look at some of the most populous states to give you a sense of how long it typically takes to get a refund there.
- In California, the Franchise Tax Board advises taxpayers that it typically takes between seven and 12 business days to get a refund if you file electronically. For those who file paper returns, you'll typically have to wait two to three months from the date you mail your return in order to receive your refund. To check on the status of your refund, you can go to this California tax website and click on the Check Refund button.
- In New York State, expectations are a little closer together regardless of whether you file electronically or by paper. E-filed returns typically get refunds back to you within three weeks if you use direct deposit, with paper returns typically taking about six weeks. The New York Department of Taxation and Finance says that you can expect paper checks to take an additional week if you don't use direct deposit. The New York tax website offers a way to check your refund status -- just click on the Check Refund Status button to begin.
- Illinois didn't start sending out refunds until March 1 during its most recent tax season. Once it did, those who had already e-filed their returns were told to expect to get refunds within two to three weeks. This Illinois tax website has answers to frequently asked questions, including a link to the Where's My Refund tool to track your own personal refund.
Don't bank on any one date
Finally, it's essential not to rely on your refund coming at any particular time. Numerous problems can arise to throw off a predicted refund schedule, including errors on your return or issues in getting it processed. Again, electronically filed returns tend to be more accurate and process more easily than paper returns, but even with e-filing, there's no guarantee that your refund will be in your account on any particular day.
If you're expecting a state tax refund, look at your own state's tax agency website to get details on how quickly it believes it will be able to process refunds. That way, you'll know what timeframe is likely and be able to inquire further if your refund is late.