Intercept Federal and State Tax Refunds

Intercept Federal Tax Refund

The federal tax refund of a parent who owes past-due support may be intercepted when the past-due balance is at least $500 and owed to the parent who receives support or $150 and owed to the state and the case is receiving Full Services.  

How does it work?

The process is very automated.  Information about the parent who owes past-due support is reported to the federal Office of Child Support Enforcement (OCSE).  Then the information is passed on to federal agencies that issue payments, including the IRS.  The federal agencies match the report of parents who owe past-due support with their payment files and withhold amounts that would otherwise go to parents who owe past-due support.  The withheld amounts are sent to OCSE then on to Child Support. 

The past-due amount is reported to OCSE weekly.  The intercept amount is never more than the amount reported.  If your federal payment is greater than the past-due amount, the excess will be returned to you by the federal agency

When a federal agency such as the IRS withholds a payment, the agency notifies the parent who owes past-due support of the withholding.  Child Support does not know about amounts withheld until the funds reach us because of the strict confidentiality policies of the IRS and other federal agencies.  Child Support doesn't have information about who files taxes or who will be getting a refund.  If you have questions about your tax refund please contact the IRS.

It can take several weeks from the time of the withholding for Child Support to receive the funds.

Intercepted payments that are subject to an adjustment are held for up to 6 months before the funds are disbursed.  When viewing payments online, held payments will show as 'Held for Grace Period'.

If you are the parent who owes past-due support and you are filing taxes jointly, the other person listed on the taxes can file an Injured Spouse Allocation of a Joint Return (Form 8379) with the IRS to get his or her portion of the tax refund. 

Intercept Administrative Payments

Certain other payments issued by federal agencies can be intercepted by Child Support.  This is often called Administrative Offset.  The process with administrative offset is the same as it is with federal tax refund intercept. 

Intercept State Tax Refund

The state tax refund of a parent who owes past-due support may be intercepted when the past-due balance is at least $25.00 and the case is receiving Full Services.

Information about the parent who owes past-due support is reported to the State Tax Department.  The State Tax Department matches the report of parents who owe past-due support with their payment files and withholds amounts that would otherwise go to parent who owes past-due support.  The withheld amounts are sent to Child Support.  The State Tax Department sends a notice to the parent who owes past-due support when the parent's state tax refund is sent to Child Support.

If you are the parent who owes past-due support and you are filing taxes jointly, the other person listed on the taxes can file an Injured Spouse Allocation of a Joint Return (Form 8379) with Child Support to get his or her portion of the tax refund.