State income tax returns are just as important as the federal equivalent. Some states tax certain types of income; some only tax income earned outside of wages, and some don’t tax at all.
See the states without income tax.
One thing is for sure, though, when you file a state income tax return, you’re most likely to get a tax refund. Like federal taxes, we pay state taxes gradually during the year, and the chances are you’ll end up paying more than what you actually owe. In these cases, you’ll be due a tax refund, and your state tax department will send you one by depositing it to your bank account.
Additionally, you may also request a paper check instead of electronic payment. It comes down to your preferences and what’s most convenient for you. No matter how you choose to get your tax refund, processing times and how long you’ll wait for depends on several factors.
Direct deposits over paper checks
Almost always, direct deposited tax refunds take less time. State tax departments – the same way as the IRS – take time to print out checks and issue them to taxpayers. Not only that, but you may receive electronic payments in a matter of hours, whereas checks can take up to a week or so once the tax department sends
The bottom line is it takes less time for state departments to direct deposit tax refunds compared to paper checks.
State tax department processing times
Your state income tax return doesn’t matter as much as how fast the tax department in your state processes returns.
A great example of this is the two biggest states that also happen to have one of the highest income tax rates in the country – California and New York. For electronically filed tax returns, both state tax departments usually direct deposit tax refunds within three weeks after receiving the return.
With paper tax returns, this mainly depends on the state tax department’s workload at that moment. The workers can process only so many tax returns, and the load is usually the highest a few weeks after the start of the tax season.
Although you’d hope to get your tax refund from a mail in tax return as fast as your federal one, it doesn’t happen that quickly. State tax agencies, especially California and New York, can take a few months to process and issue your tax refund.
The state with fewer taxpayers usually doesn’t see much of a difference between electronic and paper tax returns for processing times.
It can take a few weeks to a few months for you to get your state income tax refund. You can reduce the wait time for your refund by e-filing your state income tax return, choosing to get the refund direct deposited to your bank account, and filing early.