Is It Normal to Get My State Refund Before Federal? Here's Why It Happens

When you file your income taxes at the beginning of the year, or perhaps mid-year if you tend to wait until the deadline, you likely submit your state and federal returns together.

So naturally, you’d assume that if you're owed a refund from both, you’d receive them at the same time, right?

Well, not exactly. If you received your state refund before you're federal refund, here’s why.

State and federal income tax returns are handled by different tax agencies, so if you received your state refund before your federal one, it’s because your state processed it before the IRS did. If you live in a state that imposes income tax, you’re generally required to file a state income tax return when you’ve earned income or received certain government benefits. Additionally, you're required to file specific income tax forms with the IRS.

Although tax preparation software like TurboTax and H&R Block helps you file both state and federal returns, your tax forms are not all sent to the IRS. Instead, your federal income tax forms go to the IRS, while your state tax forms are submitted to your state’s department of taxation. These are separate systems operating on their own timelines, meaning your state refund may be processed faster than your federal one, or vice versa.

Typically, most people receive their federal refund before their state refund. However, in 2025, taxpayers were warned that amid employee cuts at the IRS, there could be processing delays, per CBS News, which is why some taxpayers might have received their state refunds before their federal ones.

Now, even though state and federal taxes are handled by different agencies, they do communicate with each other. So, if you have an outstanding balance with your state income tax agency, your state can request that the IRS withhold part or all of your federal tax refund to satisfy the debt.

Once the balance is covered, any remaining amount will be sent to you. Taxpayers are typically notified when a portion or all of their federal refund is applied to their state tax debt, but this isn’t always communicated.

No matter where you live, you’re required to pay federal income tax. However, whether you owe state income tax, or qualify for a state tax refund, depends on where you reside. Each state sets its own tax rates and offers specific deductions or credits to its residents.

That said, eight states don’t impose a state income tax at all. These include: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming, per TurboTax.

California, New York, Hawaii, and New Jersey had some of the highest state income tax rates in 2023.

To recap, if your state collects income tax and you received your state refund first, it simply means your state’s tax agency processed your return before the IRS did. You can track your IRS refund using the agency’s online refund tracker, which updates you on when your federal return is received, your refund is approved, and when it has been sent.