Federal Income Tax vs State Income Tax

We just received our federal tax return of $3k and we owe the state $785. The federal refund was direct deposited to our checking and I just turned around & took out the $785 from the same account & paid the state. I'm leaving the remainder in TBB because I'm  going to put it in our savings since I'm still working on building the EF. How do I enter the refund and payment in YNAB? I don't have any "income tax refund/payment" categories. Do I need to set those up? 

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  • For the state payment, yeah I would set up a taxes category. But you federal refund should just be treated as income because it is literally your income - you paid too much in taxes out of your paycheck and now the feds are giving it back. 

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