I received a tax refund from the state... except they don't owe me a refund

In My Humble Opinion
1

A few days ago I got a tax refund check in the mail from the state of California. The problem with that is that as far as I know they don’t actually owe me a refund this year. On my 2020 taxes I owed them money. I filed my taxes all the way back in Feburary (e-filed using H&R Block’s software), and they withdrew the payment from my checking account via electronic funds withdrawal within a week of when I filed.

I tried calling the Franchise Tax Board (California’s tax agency) about it today, and just got a recorded message “We are experiencing extremely high call volume and are unable to take your call.” They didn’t even put me on hold. Someone in one of their phone menus there was a recorded message stating something to the effect of “If we make adjustments to your taxes we will notify you via letter” except I didn’t receive any letter, just this check out of the blue.

Another option for contacting them is via secure message on their website, except that requires signing up for an account and receiving a PIN in the mail which can take weeks. But I started the process so I guess I can go that route if I can’t get through to them any other way before then.

2

There’s a rebate due to a budget surplus.

Could that be it?

3

From everything I’ve read, I made too much money last year to qualify for that. Unless there’s some prorated amount for people who made somewhat more than the cutoff, but nothing I’ve read said anything like that.

4

Wait a few more days, and you might get a letter of explanation by snailmail.

5

This has been my experience. Got an unexpected refund check from FTB; explanation letter was mailed separately & arrived a week or two later.

6

If you’re really worried about it,.put the $ in a separate account in escrow until you can get a straight answer. Only probably worth it if the amount is significant, such that holding onto it, if in error, could look sus and/or be hard to pay back if they say “hey”.

IANAL but I’ve heard of this being done defensively in similar cases.

7

This isn’t the same as a bank erroneously transferring $10 million into your account and then suing or jailing you for trying to keep it.

What’s the likelihood of someone suffering penalties for spending a state tax refund check?

8

That article says those checks won’t be distributed until early September. Only goes to those making less than $75K…like the money from the feds.

9

So I got my PIN number to allow me to access my tax account online, and I see what happened. In California you can voluntarily contribute to various funds on your tax return, essentially making a charitable contribution in addition to your tax payment. I contributed to two of those funds on my return. One of them was directed to the correct fund, but the other was not, and was instead simply refunded to me as an overpayment.

10

Great to hear that it turned out to be totally correct after all.

It would be interesting to find out what happened with that second donation, and whether all the other contributors also got theirs back. My guess is that the organization either went out of business, or maybe just no longer qualifies as a charity.

11

Glad to hear it was legitimate, even if it wasn’t what you intended.

My first thought was that it was stage 1 of a multi-part scam, but I think the scammers mostly go after the IRS versus the state. My in-laws received a rather large refund check from Uncle Sam a couple years back - for a year in which they had NOT FILED TAXES. The scammers go their ID info, filed a fake return, and apparently either the account they set up to receive the “refund” had been closed, or the plan was to wait until the in-laws cashed it, then make a threatening phone call claiming to be the IRS wanting its money back NOW.