Last year I owed $500+ state tax. This year, refund. Is this possible??

I used Turbo Tax last year and this year. My income was higher (17K state taxable as opposed to under 5K state taxable this year), and I claimed one more kid this year. I’m not sure why the big difference in my state taxable–my income was about $5K less this year, but there is a huge difference in my state taxable income, according to the forms I’m looking at.
Does that make sense? I know zero about taxes, which is why I use Turbo Tax and just trust it. But I still haven’t paid the $500 from last year, and now I’m wondering if I need to investigate further.
Any input at all would be so helpful. Thanks!

Most states allow you to apply a refund against a past due amount. CA does, but I can’t say I’m familiar with Indiana tax law.

That extra child is likely what did the trick for you.

Look at your W2s and divide the state tax paid this year by the amount of taxable income.

Then look at last year’s and do the same.

Last year you would have paid a smaller percent (state tax withheld/total income) and owed the state some money to meet the total % they would take out for your tax bracket. This year, you paid a larger percent than your tax bracket so you get a refund.

Or at least that’s how I would look at it. I am not a tax professional…nor am I good with m4th.

Same thing happened to us in Colorado. We owed last year, couldn’t afford to pay it. We tried to do a payment plan, but the IRS rejected it because unbeknownst to me, my ex-husband lied about having filed our 1999 joint return. This year, we’ve got one more child and got a refund. We’ll probably even see some of it, because our refund was about 3 times what we owe.

You’re looking for logic, consistency, and coherence in the tax code. It’s not there. Enjoy your refund!

Well, there’s $1000 right there in child tax credit, not to mention the reduced tax burden due to the extra exemption.

What state do you live in? Here in PA we have a flat tax so we pretty much don’t owe or have refunds from the state because they know exactly how much to take out.