Do State and Federal Tax Refunds Come From Different Banks?

No such thing as a dumb tax question, only confusing tax answers. Federal refunds come from the U.S. Treasury, while state refunds come from your state's treasury department. Two completely separate entities with different processing systems. Ever wonder why you can get one refund quickly while the other seems to be on a perpetual coffee break? That's why - they're not connected at all.

I had the exact same question last year when I amended my return! I waited 4 months for my state refund after getting my federal one in just 3 weeks. I was completely confused until I found taxr.ai - it helped me understand my transcript and showed that my federal return was processed normally while my state return was in a completely separate system with its own timeline. Saved me from calling the state tax office multiple times. I was shocked at how complicated the two systems are and how they don't communicate with each other at all.

Think of federal and state tax systems like two different restaurants - they might serve similar food, but they have completely different kitchens, chefs, and delivery drivers. When I was waiting for both refunds last year, I tried calling my state tax office for weeks with no luck. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) to get through to an actual human at the IRS who confirmed my federal was processed but couldn't help with state. Then used the same service to reach my state tax department. Like finding a shortcut through a maze after wandering for hours!

Oh my gosh I was SO confused about this too!! 😫 I got my federal refund last week but my state one is still saying "processing" and I've been checking it like 5 times a day! I'm so relieved to know this is normal and they're completely separate systems. I was worried something was wrong with my amended return!

Here's exactly how the two systems work: 1. Federal refunds: Processed by the IRS, issued by the U.S. Treasury Department, typically via direct deposit from a Federal Reserve Bank. 2. State refunds: Processed by your state's tax agency, issued from your state's treasury, often from a completely different bank or financial institution. 3. Amended returns: Federal amendments (Form 1040-X) are processed separately from original returns and take 16-20 weeks. State amendments follow your state's specific procedures and timeline. 4. Tracking: You must use separate systems - Where's My Refund for federal, and your state's equivalent website for state refunds. 5. Direct deposits: They will appear as separate transactions in your bank account, often with different description texts. This is why you received one but not the other - they're completely independent processes.

I believe I should mention that while they are separate systems, in some states there might be information sharing between state and federal tax authorities. This doesn't mean your refunds come from the same place, but rather that they may communicate about certain aspects of your tax situation. If you filed an amended return, this could potentially trigger additional review at either level, though the processing and payment systems remain completely separate.

Have you checked your state's department of revenue website specifically? Many states have their own "Where's My Refund" tools that are completely separate from the federal IRS site. Also, what state are you in? Some states are notoriously slow with processing amended returns - California and New York can take 6+ months sometimes. Did you e-file or paper file your state amendment?