Yes, you can get both state and federal tax refunds in the same year. The two are separate payments from separate governments, and each one depends on whether you overpaid that particular government during the year. Depending on your withholding, your credits, and whether your state even taxes income, you might receive two refunds, one, or none.
Why the Two Refunds Are Independent
Federal income tax works on a pay-as-you-go system. Your employer withholds a portion of each paycheck and sends it to the IRS on your behalf.1Internal Revenue Service. Tax Withholding for Individuals If your state also taxes income, your employer sends a separate withholding amount to your state’s revenue department at the same time.2Internal Revenue Service. Depositing and Reporting Employment Taxes Both amounts are estimates based on what you put on your W-4. They rarely match your actual tax bill exactly.
When you file, you calculate what you truly owe each government. If you paid more than that through withholding or estimated payments, the difference comes back as a refund. Federal and state taxes are calculated independently, with different rates, deductions, and credits, so the two results almost never match. You could owe one government while getting a refund from the other.
Refundable credits can push a refund higher, and in some cases produce a refund even when you owed nothing. Most credits only reduce tax down to zero, but refundable credits pay the remaining balance directly.3Internal Revenue Service. Refundable Tax Credits The federal Earned Income Tax Credit is one of the largest, aimed at low- to moderate-income workers.4Internal Revenue Service. Earned Income Tax Credit (EITC) Because each state sets its own credit rules, you might qualify for a refundable credit from one government but not the other.
If Your State Has No Income Tax
Nine states do not tax wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of them, you won’t file a state income tax return and won’t receive a state refund on withheld wages. New Hampshire previously taxed interest and dividend income but fully phased that tax out in 2025. Washington taxes long-term capital gains above a high threshold, so residents with large investment gains can still have a state tax obligation even though their wages are untaxed.
The roughly 41 states that do collect income tax often diverge from federal rules on what income is taxable and which deductions apply. Some allow deductions for education savings or local industries that don’t exist at the federal level. Those differences are why your state refund almost never mirrors your federal refund.
Why One Refund Might Be Smaller, Larger, or Missing
Debt Offsets
The Treasury Offset Program lets the federal government intercept your refund to pay overdue debts, including delinquent child support, defaulted federal student loans, and past-due amounts owed to other federal agencies.5Bureau of the Fiscal Service. Treasury Offset Program – How TOP Works If an offset reduces or eliminates your refund, you’ll get a notice explaining the amount taken and which agency received it. States run similar programs that can intercept a state refund before it reaches you.6Bureau of the Fiscal Service. Treasury Offset Program – FAQs for Debtors in the Treasury Offset Program
Timing Differences
Federal and state agencies process returns on their own systems and schedules. Electronically filed federal returns are generally processed within 21 days.7Internal Revenue Service. Processing Status for Tax Forms State refunds run on completely separate timelines, and it’s common for one refund to arrive two to four weeks before the other. A state refund that seems missing is often still in a longer queue. You can check federal status 24 hours after e-filing through the IRS “Where’s My Refund?” tool, the IRS mobile app, or the automated hotline at 800-829-1954, using your Social Security number, filing status, and exact refund amount.8Internal Revenue Service. Where’s My Refund? Most states offer their own tracking portals. Direct deposit speeds both up.
Withholding That Matched Too Closely
If withholding closely matched your actual liability for one government, you might owe a small amount or receive no refund there while still getting a meaningful refund from the other. Nothing has gone wrong. Your withholding was simply more accurate for one tax than the other.
If You Work in a Different State From Where You Live
Living in one state and working in another can produce two state returns, and both can generate refunds. The default is that your employer withholds for the state where you physically work. If that isn’t your home state, withholding may end up going to the wrong state, both states, or in mismatched amounts, and you sort it out at filing.
Some states have reciprocal agreements with neighbors. Where one exists, your employer withholds only for your home state. Without an agreement, you typically file a nonresident return in the work state (which may refund excess withholding) and a resident return in your home state (which usually gives you a credit for taxes paid to the work state). Depending on the numbers, you might end up with two state refunds, one refund, or a refund from one state and a balance owed to the other, on top of whatever your federal return produces.
Does Last Year’s State Refund Become Federal Income?
Sometimes, but only in limited situations. If you took the standard deduction on your federal return, your state refund is not taxable at the federal level.9Internal Revenue Service. IRS Issues Guidance on State Tax Payments The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, so most taxpayers never have to think about this.10Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
If you itemized and deducted state income taxes, a refund of those taxes may be taxable the following year under the tax benefit rule. Even then, because itemized state and local tax deductions are capped at $10,000, many itemizers couldn’t deduct every dollar of state tax they paid, and in that case the refund still isn’t taxable.9Internal Revenue Service. IRS Issues Guidance on State Tax Payments
Adjusting Withholding If Your Refund Pattern Is Off
Big refunds every year mean you’re lending the government money interest-free until you file. Consistently owing means you may face underpayment penalties. Either way, you can change your withholding by giving your employer a new Form W-4.11Internal Revenue Service. Form W-4, Employee’s Withholding Certificate Step 4(c) lets you request additional withholding per pay period. Step 4(b) lets you account for deductions beyond the standard amount to reduce withholding.
The IRS Tax Withholding Estimator walks you through income, deductions, and credits and can produce a completed W-4 to hand your employer.12Internal Revenue Service. Tax Withholding Estimator Running it after a new job, marriage, a birth, or a home purchase helps avoid surprises at filing time. Adjusting the federal W-4 does not automatically change your state withholding. Many states use their own withholding forms, and if you want your state refund to look different next year, you’ll need to update those separately.