If you are past due with child support, your tax refund will be taken by the IRS and given to the other parent. You cannot stop it. If you want this to stop, then pay the past due child support. Child support is the debt that never goes away.
You may be able to avoid offset by entering repayment during the 65-day period. Once the 65-day period ends, you still may be able to stop offset by entering into a rehabilitation agreement and making the first five of the nine required payments.
While the IRS's authority to offset to a federal tax liability is discretionary, the IRS must offset refunds when the taxpayer owes any other non-tax federal debt or state liability including past due child support obligations.
You should contact the agency shown on the notice if you believe you don't owe the debt or if you're disputing the amount taken from your refund. Contact the IRS only if your original refund amount shown on the BFS offset notice differs from the refund amount shown on your tax return.
There can be lag times of two weeks or more between when an offset is taken and when the agency collecting the debt receives and processes the collection. For example, for child support debts, we send the amounts we collect to the U.S. Department of Health and Human Services' Office of Child-Support Services.
In order to request an offset bypass refund, the taxpayer, or representative, should make the request when the return is filed. The request must occur prior to assessment. The request needs to demonstrate the financial hardship the taxpayer faces. The amount of the offset limits the amount of the OBR.
Child Support - No. Child support payments are not subject to tax. Child support payments are not taxable to the recipient (and not deductible by the payer). When you calculate your gross income to see whether you're required to file a tax return, don't include child support payments received.
How Do I Stop the IRS From Taking My Refund? Your best chance is to ensure that you make payments on the six types of debt for which the BFS will hold a refund. Notify the IRS, then contact the BFS and talk to a debt analyst if you can't do this.
The IRS may agree that you have a financial hardship (economic hardship) if you can show that you cannot pay or can barely pay your basic living expenses. For the IRS to determine you are in a hardship situation, the IRS will use its collection financial standards to determine allowable basic living expenses.
To prove your tax hardship to the IRS, you will need to submit information about your financial situation to the federal government in a hardship request. This is done using Form 433A/433F (for individuals or self-employed) or Form 433B (for qualifying corporations or partnerships).
Request an expedited refund by calling the IRS at 800-829-1040 (TTY/TDD 800-829-4059). Request a manual refund expedited to you.
You must pay your benefit overpayment in full within 60 days of the date on the Notice of Intent to Offset Your Federal Income Tax Return (DE 957) to avoid having your refund offset (reduced or withheld). Visit Benefit Overpayment Services to log in or make a payment.
Refunds on a joint tax return may be applied to overdue debts such as: Past-due child support. Debts to federal agencies. State income tax obligations.
Prevent an offset
Pay the full amount listed on the Intent to Offset Federal Payments (FTB 1102). Use the payment coupon included in the letter when you send your check or money order. To make a payment online, visit Payment options .
Typically, the state child support office that submitted the noncustodial parent's case for tax refund offset receives the funds within two to three weeks. It is important to stay informed with your local child support caseworker.
The Treasury Offset Program (TOP) collects past-due (delinquent) debts (for example, child support payments) that people owe to state and federal agencies. TOP matches people and businesses who owe delinquent debts with money that federal agencies are paying (for example, a tax refund).
However, in California, custody and child support are two separate components, and one parent may be required to pay child support to the other even in a 50/50 arrangement.
Tax Refund Considerations
In some situations—especially if both spouses earn similar incomes or one spouse is claiming the children—each party will simply keep his or her respective refund. In others, however, an equitable split of the refund may be necessary.
If the noncustodial parent claims your child without permission. When the noncustodial parent claims the exemption on their taxes and they don't attach the required Form 8332 signed by the custodial parent, their tax filing doesn't comply with IRS rules. The IRS may enforce its rules.
Is there a limit to the amount of money that can be taken from my paycheck for child support? Yes. The amount that can be withheld from your wages is limited by the Federal Consumer Credit Protection Act.
As of August 1, 2021, all three of these offset programs have resumed. Individuals and business entities that expected a refund and have other government debts may be impacted.
For 2024, there's an offset of $700 for taxpayers with a taxable income under $37,500, with a pro-rata payment up to $66,667.