If your debt meets submission criteria for offset, BFS will reduce your refund as needed to pay off the debt you owe to the agency. Any portion of your remaining refund after offset is issued in a check or direct deposited as originally requested on the return.
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.
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.
Before referring your debt to the TOP, the Benefit Overpayment Collection Section will send you the Notice of Intent to Offset Your Federal Income Tax Refund (DE 957).
Do garnishments show on a pay stub? Yes, employees can access information about any garnishments withheld from their earnings under the “deductions” or “other deductions” section of their pay stub.
But is your tax refund safe from creditors? There are two ways a creditor can intercept your tax refund. The first is by getting it from the Internal Revenue Service (IRS) before your receive it. The second is to garnish the bank account you deposit or hold it in.
Yes. The Bureau of Fiscal Service (BFS) might delay or offset your refund to pay your debt.
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.
See our Held or Stopped Refund page or our video for more information. If the IRS is reviewing your return, the review process could take anywhere from 45 to 180 days, depending on the number and types of issues the IRS is reviewing. Follow these steps if you know you made a mistake, before the IRS contacts you.
The Bureau of Fiscal Services will send you a notice if there's a refund offset. The offset notice will show: Original refund amount. Your refund offset amount.
If your refund status used to be your tax return is still being processed, but now the status says it is being processed, the IRS may have detected an issue in your tax return that could cause a delay in the release of your tax refund.
Typically, the IRS takes about 60 days to review tax returns after sending letter 4464C.
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).
It can take longer to get your refund if you file a paper return or ask for a paper check. Your refund may also be delayed if numbers on your return don't match documents the IRS received about your income.
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.
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.
Low income tax offset (LITO)
If you earned: $37,500 or less, you will get the maximum offset of $700. between $37,501 and $45,000, you will get $700 minus 5 cents for every $1 above $37,500. between $45,001 and $66,667, you will get $325 minus 1.5 cents for every $1 above $45,000.
Higher individual tax rates
The TCJA temporarily lowered individual tax rates through 2025. Starting in 2026, tax rates are scheduled to revert to the higher pre-2018 levels. The table below shows the existing and anticipated tax rates if the TCJA sunsets.
Allow a minimum of 2 weeks for an offset to show on your account.
The debtor is notified in advance of any offset action to be taken. Individuals may call the TOP Interactive Voice Response (IVR) at 800-304-3107 to determine the contact information for the agency or state they owe.
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.
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.
If you owe money to a federal or state agency, the federal government may use part or all of your federal tax refund to repay the debt. This is called a tax refund offset. If your tax refund is lower than you calculated, it may be due to a tax refund offset for an unpaid debt such as child support.
The Fresh Start program for borrowers with previously defaulted student loans will prevent withheld tax refunds through at least September 2024. And borrowers won't newly fall into default as payments resume. The White House announced a 12-month student loan on-ramp from Oct. 1, 2023 to Sept.