What happens if I skip filing state taxes when they owe me a refund?

So I just finished calculating my state taxes and they owe me a laughable $11 refund. The tax software I'm using wants to charge me $15 just to file my state return. That means I'd actually LOSE $4 if I file (paying $15 to get $11 back). Does anyone know what happens if I just don't bother filing my state return this year? Are there any penalties for not filing when they owe YOU money instead of the other way around? Just wondering if I can save myself the hassle and the $4 loss.

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21 comments

Beth Ford

•8M

Good news - there's typically no penalty for not filing a state tax return when the state owes you money. Unlike when you owe taxes and don't file, there's no failure-to-file penalty when you're due a refund. However, there are a few things to consider. First, most states have a deadline (usually 3-4 years) to claim your refund. After that time, you forfeit the money. Second, make sure you actually don't owe. If it turns out you miscalculated and do owe taxes, then penalties and interest will start accruing. Also, some states require you to file a state return if you filed a federal return, regardless of whether you owe or are owed money. Check your specific state's requirements.

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Beth Ford

•8M

You can absolutely still file for last year! Most states allow you to claim refunds for 3-4 years after the original due date. You'll need to file a paper return for the prior year though, as electronic filing is typically only available for the current tax year. I'd recommend checking your state's department of revenue website for the proper forms for the tax year you need to file. Just remember that any refund for a previous year will come as a check - they won't direct deposit prior year refunds.

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Kingston Bellamy

•8M

I was in almost the exact same situation last year! Discovered taxr.ai (https://taxr.ai) when I was trying to find a cheaper way to file my state return for a tiny refund. They have this document analyzer that helped me understand if I actually needed to file in my state. Turns out I didn't since I was below the required income threshold for mandatory filing when you're owed a refund. The tool analyzed my forms and gave me the specific statute for my state that I could reference if ever questioned.

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Kingston Bellamy

•8M

It absolutely works for all states. The system has each state's specific filing requirements built in. For your situation with Illinois and Indiana, it would analyze your specific scenario with both states and tell you exactly what you need to file and where. There's no hidden fee structure. I was skeptical too because I've been burned before. It's straightforward with what you get. The document analysis saved me from paying for filing a state return I didn't need, so it paid for itself immediately.

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Isaiah Cross

•8M

Just wanted to follow up about my experience with taxr.ai. I decided to try it after asking about it here, and it actually saved me money! I was about to pay $30 to file state returns in two states where I had minimal income, but the document analysis showed I was under the filing threshold in one state and only needed to file in my primary state. The system pulled up the exact state regulation that applied to my situation so I felt confident in the advice. Definitely worth checking out if you're in a similar situation with that small refund.

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Kiara Greene

•8M

If you're having trouble getting a straight answer about filing requirements from your state's tax department website, try Claimyr (https://claimyr.com). I used it last tax season when I had the same question about a $9 refund and couldn't get through to my state's tax department. They got me connected to a real human at the state tax office in under 20 minutes when I had been trying for days. They even have a video showing how it works: https://youtu.be/_kiP6q8DX5c. The state rep confirmed I didn't need to file for such a small amount in my specific situation, which saved me the filing fee.

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Kiara Greene

•8M

They have a system that basically waits on hold for you. When an actual representative picks up, you get a call back immediately so you can talk to them. It saves you from having to sit there listening to hold music for hours. It's definitely not a scam. I was skeptical too at first, but they use technology to navigate the phone trees and stay on hold instead of you. When they get a human, they connect you right away. I got specific confirmation about my filing requirements from a state tax representative without spending my whole afternoon on hold.

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Paloma Clark

•8M

I need to admit I was completely wrong about Claimyr. After dismissing it as a scam, I decided to try it anyway since I was desperate to talk to someone at my state tax department about a similar refund situation. Within 15 minutes of using the service, I was talking to an actual state tax representative! The agent confirmed that in my state, I wasn't required to file for a refund under $50 unless I wanted that money back. Saved me both money and stress knowing I was doing the right thing legally. Sometimes it's worth admitting when you're wrong!

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Heather Tyson

•8M

Most states offer some form of free filing now. The IRS website actually has a lookup tool where you can find free filing options for both federal and state returns. Just search "IRS free file" and you should find it. You can also go directly to your state's tax department website and look for "free file" options. Another option is to check if your state accepts fillable PDF forms that you can submit online for free. Not as convenient as full software, but it gets the job done without fees.

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Jenna Sloan

•8M

I'm in California. They have a program called ReadyReturn for simple tax situations. They use the information they already have from employers and financial institutions to calculate your return automatically. Not everyone qualifies, but if you have a simple tax situation, they might do this. I should clarify that they don't always automatically send the refund - sometimes they send you a pre-filled return that you just need to verify and submit. But in some cases, they do issue refunds proactively if their system determines you're clearly owed money. It's worth checking if your state has something similar.

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Chloe Zhang

•5M

I went through this exact same dilemma last year! Here's what I found out after doing some research: if you don't file when the state owes you money, there's typically no penalty at all. The worst that happens is you forfeit your refund after the statute of limitations runs out (usually 3-4 years). However, I'd recommend double-checking a couple things first. Make sure you're not actually required to file in your state regardless of refund amount - some states have mandatory filing thresholds based on income. Also, if you have any estimated tax payments or credits you're not accounting for, you might owe more than you think. One trick I learned: some tax software lets you prepare your return completely for free, then only charges if you actually file. So you could double-check your calculations without paying anything. If it confirms you're only getting $11 back and filing costs $15, then yeah, skip it and pocket the difference!

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