Child Support – Federal Tax Refund Offset

The Federal Tax Refund Offset program is a tool that the child support office uses to collect child support arrears. The child support office can file a claim against any federal income tax refund a parent may receive, no matter how they file their tax return - electronic, mail, or rapid refund..

The child support office can do this if any of the following are true. The amount of arrears the parent owes:

  • • Is more than one month of total court-ordered child support or maintenance payments, or both
  • • Is at least $25 for arrears-only cases
  • • Have been docketed as a judgment.
  • The child support office can take a parent's federal income tax refund to pay arrears when:

  • • Cases with monthly support due: the amount of arrears is more than one month of total court-ordered child support payments and at least one of the following:
  • • $500 if the arrears are only owed to the custodial parent
  • • $150 if any arrears are owed to the state.
  • • Arrears-only cases: the amount of arrears is at least:
  • • $500 if arrears are only owed to the custodial parent
  • • $150 if any arrears are owed to the state.
  • Exclusions

    The child support office will not take a parent's federal tax refund if any of the following are true:

  • • The case does not meet the criteria above.
  • • The court order prohibits the use of federal tax refund offset.
  • Notifications

    The child support office will send an Administrative Offset and Federal Tax Refund Offset Programs notice to the parent who owes arrears. The notice tells the parent that the child support office has or will file a claim with the United States Department of Treasury for the amount of the child support arrears. The notice explains the parent’s right to a review. It also explains what will happen if the parent does not pay or take action.

    Federal tax intercept fee

    State law requires the child support office to charge the custodial parent a $25 fee when the federal tax refund offset is more than $100 and is applied to nonpublic assistance arrears. The fee is deducted from the amount collected before sending the payment to the custodial parent. If multiple cases are involved, the child support office charges the $25 fee for each case that meets the criteria.

    When the arrears owed to the custodial parent are eligible for an offset, the child support office sends the custodial parent a Notice of Federal Tax Intercept Fee.

    Holding funds

    When the child support office receives the offset funds, it applies the money to all of the parent's cases that qualify for a federal tax refund offset. The office may hold the funds for up to six months before releasing a payment to the custodial parent.

  • • Single returns
  • The state child support office holds funds received from the offset of a single federal tax refund for arrears owed to the custodial parent for 30 days before releasing to the custodial parent.

  • • Joint returns
  • The state child support office holds funds received from the offset of a joint federal tax refund for six months to allow time for the non-obligated spouse of the parent who owes arrears to file an Injured Spouse Claim with the Internal Revenue Service (IRS).

    Filing an Injured Spouse Claim

    If the parent who owes arrears filed joint tax return with a spouse, the non-obligated spouse can file an Injured Spouse Claim. The claim prorates refunds from joint tax returns so the non-obligated spouse’s portion of the refund is not used to pay the noncustodial parent’s child support obligation.

    The non-obligated spouse must file IRS Form 8379 to claim their portion of the refund. For questions about this form, call the IRS at 800-829-1040.

    Authority

    Minnesota Statutes can be found on the Minnesota Office of the Revisor Web site.

  • • 31 Code of Federal Regulations, section 285.3
  • • 45 Code of Federal Regulations, section 302.60
  • • 45 Code of Federal Regulations, section 303.6(c)(3)
  • • 45 Code of Federal Regulations, section 303.72
  • • 11 United States Code, section 362(b)(2)(F)
  • • 26 United States Code, section 6402(c)
  • • 31 United States Code, section 3720A
  • • 42 United States Code, section 652(b) and (c)
  • • 42 United States Code, section 664
  • • Minnesota Statutes Section 518A.51(f)

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