Tax Refunds Temporarily Paused
While the payment pause is ending at the end of August 2023, the Department of Education has stated that tax refund offsets will continue to be paused until at least six months after the payment pause ends.
Temporary Suspension of Offset Program until July 31, 2021 June 2021 Tax News. FTB has temporarily suspended the collection activities of the Interagency Intercept Collection (IIC) Program in keeping with the Governor's March 12, 2020, Executive Order .
This bill, for taxable years beginning on or after January 1, 2024, prohibits the Controller from offsetting delinquent accounts against the personal income tax refunds of an individual who received the California Earned Income Tax Credit (CalEITC) or the Young Child Tax Credit (YCTC) for the taxable year.
If you're worried about the IRS taking your tax refund, you're in the right place. Note: The Department of Education stopped collection activity (including tax offsets) through the payment pause. However, collection activity is set to resume in 2025.
The student loan tax offset program resumed in 2024. If you have federal student loans in default, your 2025 tax refund may be at risk. If you're behind on payments, try using a student loan calculator to help come up with a repayment strategy and contact your student loans servicer about getting caught up.
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.
The Department of the Treasury will notify you by mail when a federal offset occurs. The letter includes the amount and date of the offset, and EDD contact information.
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 .
If the constant thought, “if my husband owes taxes, do they come after me?” is running through your mind, it's important to know the power the IRS has over your house and assets. Unfortunately, yes, the IRS can seize your house or assets, even if your spouse is the one who owes money to the IRS.
The Treasury Offset Program is a debt collection tool that allows the federal government to collect income tax refunds and certain government benefits (for example, Social Security benefits) from individuals who owe debts to the federal government.
The IRS has a limited window to collect unpaid taxes — which is generally 10 years from the date the tax debt was assessed. If the IRS cannot collect the full amount within this period, the remaining balance is forgiven. This is known as the "collection statute expiration date" (CSED).
The IRS will issue these balance due notices and letters in gradual stages in 2024 to ensure taxpayers who have questions or need help are able to reach an IRS assistor. This will also provide additional time for tax professionals assisting taxpayers.
If you owe a federal tax debt from a prior tax year, a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt. In fact, in many situations the IRS is legally required to forward your refund to pay the debt.
Remember, Congress passed a law that requires the IRS to HOLD all tax refunds that include the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) until February 15, 2025, regardless of how early the tax return was filed.
Not all debts are subject to a tax refund offset. To determine whether an offset will occur on a debt owed (other than federal tax), contact BFS's TOP call center at 800-304-3107 (800-877-8339 for TTY/TDD help).
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.
TAS Can Help You Obtain an Offset Bypass Refund
Since timing is critical, call the local TAS office to verify your Form 911 has been received and assigned to a local case advocate. Taxpayers must file their original return with the IRS. A return is not considered filed until the IRS receives it.
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.
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.
If you owe back taxes, the IRS will take all your refunds to pay your tax bill, until it's paid off. The IRS will take your refund even if you're in a payment plan (called an installment agreement).
If a taxpayer refund isn't what is expected, it may be due to changes made by the IRS. These changes could include corrections to the Child Tax Credit or EITC amounts or an offset from all or part of the refund amount to pay past-due tax or debts.
After an inflation adjustment, the 2024 standard deduction increases to $14,600 for single filers and married couples filing separately and to $21,900 for single heads of household, who are generally unmarried with one or more dependents. For married couples filing jointly, the standard deduction rises to $29,200.
The cash boost is a one-time $600 payment for eligible recipients, delivered in December 2024. The payment is tax-free and will be automatically added to regular Centrelink payments. The initiative is part of the government's efforts to provide immediate financial relief to those struggling with rising costs.