States collect their own taxes and set their own rules. Many have payment plans and some have offer programs. A deal with the IRS does not cover your state debt, and a state deal does not cover the IRS.
Who it fits
People who owe state income, sales, payroll or business taxes.
- Who it fits
- Owe your state
- Cost
- Rules, fees and time limits differ by state.
- IRS form
- Set by each state
What to know first
California's Franchise Tax Board, for one, reviews its offer apart from any offer you make to the IRS or other state agencies.
The federal Treasury Offset Program can take your federal refund for state income tax debt.
California, for example, has an offer in compromise program. Its offers must be a lump sum, not a payment plan.
States like California want all required returns filed before they review an offer.
In those states, back taxes are often sales or business taxes, or the debt is with the IRS.
Our state pages link each fact to the state agency, so you can check it yourself.
Common questions
Will my federal refund pay my state tax debt?
It can. Debt offsets can take a federal refund for state income tax debts.
Source: IRS: Topic 203, Reduced refund
Does an IRS offer settle my state debt too?
No. California's FTB, for example, looks at its offer separately from any IRS offer.
Results depend on your situation. Not every case qualifies.
