Federal refunds are typically larger than state refunds, but the gap depends on where you live and how much you withheld
Your federal refund is almost always the bigger number. The federal government collects more tax from your paycheck than any state does, so when you've overpaid, the federal amount owed back to you is usually larger. But the size of each refund depends on three things: your income, your withholding choices on your W-4, and whether your state has an income tax at all.
If you live in a state with no income tax—Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming—you'll only get a federal refund. Nine other states tax income but don't tax wages, which means you may owe nothing to the state even if you owe federal tax. For everyone else, both refunds exist, but the federal one is almost always larger because the federal tax rate is higher and applies to more of your income.
The actual size of your refund depends on how much you asked your employer to withhold. If you claimed zero dependents or checked the "hold more tax" box on your W-4, you're withholding more than you owe, and your refund will be bigger. If you claimed dependents or asked to withhold less, your refund shrinks—or disappears entirely if you didn't withhold enough.
Key Takeaways
- Federal refunds are larger than state refunds in most cases because federal tax rates are higher and the federal government collects more from your paycheck.
- Nine states have no income tax at all, so residents in those states receive only a federal refund.
- The size of both refunds depends on your W-4 choices—the more you ask your employer to withhold, the larger your refund will be.
- Your state refund can be larger than your federal refund if you live in a high-tax state and claimed many dependents on your federal return.
- Comparing your two refunds is useful only if you're trying to adjust your withholding for next year—a larger refund means you gave the government an interest-free loan.
How federal and state tax rates create the size difference
The federal government takes a percentage of your income in tax brackets that range from 10% to 37%, depending on how much you earn. Your state's rate varies widely. Some states like California tax up to 13.3%, while others like Colorado tax at a flat 4.4%. This difference in rates means the federal government is collecting more from your paycheck in the first place.
When you overpay taxes throughout the year—which happens when you withhold more than you actually owe—the refund you get back reflects that overpayment. Because the federal withholding is larger, the refund is usually larger too. A person earning $50,000 in California might overpay federal tax by $800 but overpay state tax by only $200, making the federal refund four times bigger.
However, this isn't a rule that applies everywhere. In high-tax states like New York, New Jersey, or Maryland, the state refund can be substantial. And if you claimed many dependents on your federal return but few on your state return, your state refund could actually exceed your federal one.
Why your W-4 choices matter more than which refund is bigger
The real question isn't which refund is bigger—it's whether you're withholding the right amount in the first place. A large refund means you gave the government an interest-free loan all year. The IRS doesn't pay you interest on that money, so you could have used it to pay down debt, save, or invest.
If your federal refund is much larger than your state refund, you're probably withholding too much on your federal W-4. You can adjust this by claiming more dependents, checking the "hold less tax" box, or using the IRS withholding calculator at irs.gov. The goal is to owe close to zero at tax time—not to get a big refund.
The same logic applies to your state return. If your state refund is large, you can adjust your state W-4 to withhold less. Most states have their own withholding calculators on their tax agency websites. Making these changes now means you'll have more money in each paycheck instead of waiting months for a refund.
States with no income tax and how they affect your refund
If you live in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming, you have no state income tax to file and no state refund to receive. Your only refund comes from the federal government. This doesn't mean you pay less in total taxes—these states often make up the difference with higher sales taxes, property taxes, or other fees—but it does mean your refund picture is simpler.
Nine other states—Illinois, Mississippi, New Hampshire, Pennsylvania, Tennessee (which taxes only dividends and interest), and a few others—have limited income taxes that don't apply to wages. If you earned only wages in these states, you may not owe state tax at all, which means no state refund. But if you had other income like interest or capital gains, you might owe state tax on that.
If you moved during the year or worked in multiple states, your refund situation gets more complex. You may need to file part-year returns in each state, and your refunds will reflect only the income you earned in each one. The IRS and your state tax agency both have tools to help you figure out which states you owe tax to.
When your state refund might actually be larger
In rare cases, your state refund can exceed your federal refund. This usually happens in high-tax states when you claim many dependents on your state return but fewer on your federal one. For example, some states allow dependent exemptions that the federal government eliminated in 2017, so your state withholding could be much lower than your federal withholding.
New York, California, New Jersey, and Maryland all have state refundable tax credits—like the Earned Income Tax Credit (EITC)—that can push your state refund higher. If you have children and a lower income, your state EITC might be larger than the federal version, making your state refund bigger overall.
Another scenario: you worked in a state with high income tax but lived in a state with low or no income tax. Some states give you a credit for taxes paid to other states, which can reduce what you owe. This doesn't make your state refund bigger, but it does change how much you get back from each one.
How to compare your refunds when you file
When you file your taxes, your federal return (Form 1040) will show your refund amount on line 33 if you're getting money back. Your state return will show its refund on a similar line—usually labeled "amount you're getting back" or "refund." These two numbers are separate and independent. Getting a large federal refund doesn't affect your state refund, and vice versa.
If you file electronically, both refunds will be deposited into your bank account on different schedules. Federal refunds typically arrive within 21 days of acceptance, though some take longer if the IRS needs to review your return. State refunds vary by state—some arrive in two weeks, others take six to eight weeks. You can track both using the IRS "Where's My Refund?" tool and your state tax agency's tracking tool.
If you're filing on paper, both refunds will arrive by check, and the timing is slower. Federal paper refunds take about six to eight weeks. State paper refunds depend on your state's processing speed, which you can find on your state tax agency's website.
What to do if one refund is much bigger than the other
A big gap between your federal and state refunds isn't a problem—it's normal. But it's worth understanding why the gap exists so you can adjust your withholding if you want to. Use the IRS withholding calculator at irs.gov/taxes/individuals/tax-withholding-estimator to see if you're withholding the right amount federally. Then use your state's calculator (search "[your state] withholding calculator") to check your state withholding.
If both refunds are large, you're withholding too much overall. You can increase your dependents on both your federal and state W-4 to bring your withholding down. If both refunds are small or you owe money, you're withholding too little, and you should decrease your dependents or check the "hold more tax" box.
Keep in mind that withholding changes take effect on your next paycheck, so if you're already filing for this year, you can't change this year's refund. But you can make changes now for next year. The goal is to have as little refund as possible—ideally close to zero—so you keep more of your money throughout the year instead of waiting for a refund check.
Frequently Asked Questions
Can my state refund be bigger than my federal refund?
Yes, though it's uncommon. High-tax states like California and New York can produce large state refunds, especially if you have dependents or may have access to for state tax credits. Some states also allow dependent exemptions that the federal government doesn't, which can lower your state withholding and increase your refund.
Why is my federal refund so much bigger than my state refund?
Federal tax rates are higher than state rates in most places, so the federal government withholds more from your paycheck. When you overpay, the federal refund is larger. This is normal and doesn't mean anything is wrong with your return.
Do I get both refunds at the same time?
No. Federal refunds typically arrive within 21 days of acceptance if you file electronically. State refunds arrive on a separate schedule—some states process them in two weeks, others take six to eight weeks. You can track both using your state tax agency's website and the IRS "Where's My Refund?" tool.
If I live in a state with no income tax, do I still get a refund?
You only get a federal refund. States like Texas, Florida, and Washington have no income tax, so there's no state refund to receive. Your only refund comes from the federal government based on your federal withholding.
Should I try to get a bigger refund by changing my W-4?
No. A bigger refund means you overpaid taxes and gave the government an interest-free loan. Instead, adjust your W-4 to withhold the correct amount so you owe close to zero at tax time. This keeps more money in your paycheck throughout the year.