Can I File My Federal and State Taxes Separately?

Tax season can be challenging, with federal and state obligations adding layers of complexity. A common question is whether it’s possible to file federal and state taxes separately. Various factors, such as differing deadlines or financial strategies, often drive this consideration.

Connection Between Federal and State Returns

Federal and state tax returns are closely linked, with the federal return often forming the basis for the state return. Many states, including California and New York, use federal adjusted gross income (AGI) as a starting point for calculating state taxes. This connection means that changes to your federal return, such as amendments or audits, can directly affect your state return. Some states also offer credits or deductions tied to federal tax attributes, such as the Earned Income Tax Credit (EITC), which is mirrored in several state systems.

Filing Each Return Separately

In some situations, filing federal and state tax returns separately is advantageous. For example, residents of states without income tax, like Texas or Florida, only need to file a federal return. Different deadlines between federal and state returns can also prompt separate filings. While the federal deadline is typically April 15, some states may offer extensions or have different due dates, allowing more time to gather state-specific documentation or accommodate changes to the federal return.

Separate filings can also align with financial strategies. For instance, a taxpayer expecting a federal refund might file the federal return first to receive funds sooner while delaying the state return for additional planning. This approach is especially useful in states offering deductions or credits that require detailed documentation.

Adjusting a State Return After a Federal Filing

Changes to a federal tax return, such as amendments or audits, often impact the state return due to their interconnected nature. Taxpayers must ensure federal adjustments are accurately reflected on their state returns to avoid penalties. States like Massachusetts and Illinois require federal changes to be reported within specific timeframes, often within 90 days, to prevent discrepancies that could trigger audits or penalties.

After federal adjustments, taxpayers should promptly review their state return. This includes recalculating state-specific elements like credits, deductions, and exemptions that might be affected. For example, a lower federal adjusted gross income could reduce state tax liability, potentially increasing a refund or lowering the amount owed. Taxpayers must also update any state-specific forms or schedules to reflect the revised information.