Federal and state guide
Federal vs. State Tax Refunds: Why the Amounts Are Different
A federal refund and a state refund come from different tax systems. Each compares its own payments with its own liability, so one return can show a refund while the other shows an amount due.
Key takeaway: Never combine federal and state withholding before calculating the two results separately; use a combined number only as a final cash-flow summary.
Two agencies, two calculations
The IRS calculates federal income tax under federal law. A state revenue department applies its own brackets, deductions, exemptions and credits. Refunds are therefore processed and paid separately.
The ToolsFA combined result is a planning convenience. Review the federal and state lines before relying on the total.
Example: A $1,200 federal refund and a $400 state balance due produce an estimated combined cash result of $800, but the payments will not be issued or collected together.
Related: Estimate a refund from your W-2 →
States without a broad wage-income tax
Several states do not impose a broad individual income tax on wages. That does not remove federal income tax, FICA, sales tax, property tax or every state-level tax.
Washington has a separate capital-gains tax that is outside this wage-income calculator. New Hampshire does not tax wage income.
- ✓ Alaska
- ✓ Florida
- ✓ Nevada
- ✓ New Hampshire
- ✓ South Dakota
- ✓ Tennessee
- ✓ Texas
- ✓ Washington
- ✓ Wyoming
When a one-state estimate is not enough
Part-year moves, remote work across state lines, nonresident returns and city taxes can materially change the outcome. New York City, Yonkers and many Pennsylvania and Ohio localities are common examples.
Use the calculator as an initial resident-state estimate, then check the relevant state revenue agency for filing and allocation rules.
Related: 2026 Child Tax Credit →
Frequently asked questions
Can the IRS offset my state refund?
Federal and state refund administration is separate, although government debts and offset programs can affect refunds.
Why is my state refund $0 in the calculator?
A selected state may not impose a broad tax on wage income, or entered state withholding may equal the simplified estimate.
Are city income taxes included?
No. Local income taxes are excluded and can materially change the final result.
Official sources and important note
General educational information only, not personal tax advice. Confirm your position with the IRS, your state tax agency or a qualified tax professional.