Tax Refunds Going to Child Support
- The Financial Management Service, the part of the U.S. Treasury Department that processes refunds, handles the federal tax offset program. Each state child support agency submits the personal information and Social Security numbers of parents in support arrears to the FMS for collection. Your child support arrears must reach $150 if the child support case involves federal cash assistance, while cases without cash assistance must reach $500 in arrears before the noncustodial parent's federal refund is touched.
- You will receive a notice from the FMS if your refund is taken for child support that shows how much you owed, how much the FMS took, and what agency the money was sent to, along with the agency's contact information. You have the right to dispute the arrears in full or in part with the collecting child support agency to stop the offset or get your tax refund back.
- If you owe child support areas in different states, each state can submit your information to the FMS for refund interception. The FMS determines how much each state agency gets from the total refund toward the owed support. You might have an intercepted tax refund even if you've already paid your arrears because of an update lag between the FMS and the state collection agency. States must submit eligible child support arrears cases for refund offset, even if the support payer is unemployed or experiencing financial hardship. Federal laws do not grant a noncustodial parent any exemptions from refund offset.
- Income tax agencies don't just take your refund. If you're married and filing with a spouse who does not owe the child support, the agency can take the entire refund due on the return. Your spouse must file Form 8379, Injured Spouse Allocation, with the tax return or after the interception to request her part of the refund. Bankruptcy does not stop the interception of your tax refund for support arrears. Child support debt is not eligible for discharge in bankruptcy under federal laws.
