What can I do to get a state tax refund instead of paying state taxes every year?
You can change your state withholdings by submitting a new state W-4 to your employer. Here’s what you need to do:
- Start with the amount you have to pay the state annually. Divide it by the number of paychecks you receive annually.
- Round the result up. You can round it to the dollar, five dollars, or ten dollars. This just depends on how large a state refund you would like.
- Put the result in as an additional amount to withdraw for your state withholding per paycheck. This will cover the amount you’ve been paying to your state at tax time. Depending on how late it is in the year when you make the adjustment, you might still have a balance due the first year. However, the money should balance out the next year.
- Make any other adjustments as necessary.
Other options include:
- Reducing your W-4 allowances for the state
- Paying estimated quarterly state taxes so you receive a refund instead of owing
Both of these are based on how much you think you’ll owe in state taxes next year.
Related Resources
Not sure if you are withholding enough taxes from your paycheck given the Tax Cuts and Jobs Act? Learn how to estimate your 2018 tax liability with H&R Block.
Wondering how to use your tax refund? You can save your tax refund or pay down debt to improve your financial situation. Learn more at H&R Block.
How long penalty abatement takes depends on the type of penalty relief you’re requesting. Learn more from the tax experts at H&R Block.
Learn more about letter 168C, why you received the letter, and how to handle an IRS bill for unpaid tax with help from the tax experts at H&R Block.
