Are you a noncustodial parent wondering whether the federal government can garnish your tax refund in order to pay overdue child support? If so, the the answer is yes.
Through the Treasury Offset Program, federal law allows the U.S. Treasury Department to garnish income tax refunds to pay down past-due child support as reported by state child support agencies.
However, there are restrictions on what the federal government can do to ensure you meet your child support obligation. It’s unlikely that you can completely get out of paying child support. But there are steps you can take to pay down your unpaid child support without financial hardship.
This article will walk you through:
- Concepts you should understand about enforcement methods
- Legal requirements
- How you can work within the rules to stop child support from taking your tax refund
Before we begin, please understand that this article was written for educational purposes only. This is not legal advice. For specific information and recommendations about your particular situation, you should consult with a family law attorney or make an appointment with your state child support office.
Let’s start with getting a clearer picture of how the federal tax refund offset program works.
How the federal tax refund offset program works
There are several steps involved in the federal tax refund offset program.
Local and state child support offices report delinquent child support payments to OCSE
When non-custodial parents fall behind on their child support payments, their local child support office reports the child support case to the state child support office. From there, the state child support agencies report the child support debt to the federal Office of Child Support Enforcement (OCSE).
They will report specific information about the case, to include:
- Social Security number
- Past-due amount of the child support payments
Once OCSE determines that there is sufficient evidence to warrant a federal tax refund offset, OCSE will send notification to the noncustodial parent in question. This is called a pre-offset notice.
Pre-offset notice issued to non-custodial parent
The pre-offset notice explains:
- Why the child support case was submitted to the tax refund offset program
- How much past-due support the non-custodial parent owed at the time the OCSE issued the notice
The pre-offset notice also includes additional information about federal tax refund offset, passport denial, and other actions that the child support enforcement office can take to enforce or collect against child support arrears.
Finally, the pre-offset notice explains how the debt can be challenged and how to request an administrative review.
Notice of payment
According to the IRS website, the Treasury Department’s Bureau of the Fiscal Service can withhold a portion of the tax refund, or the entire refund to pay down:
- Past-due child support;
- Federal agency non-tax debts;
- State income tax obligations; or
- Certain unemployment compensation the taxpayer owes to a state government
This tax refund seizure, also known as an intercepted tax refund should satisfy the outstanding debt amount. The Treasury Department will any remaining portion of the refund left over after satisfying the debt to the taxpayer.
How to avoid having your income tax refund garnished to pay child support
There are several ways to avoid having your income tax refund seized to pay child support
Make the child support payments
If you’re able to make child support payments, make them. The right thing to do is to contact the local child support agency and make up your delinquent payments. Even if you can’t make the entire payment, talking with your local office will help you:
- See if you can set up monthly payments to make up the past-due support amount
- Ask questions about the administrative appeal process
- Understand if you need to file for an administrative hearing
If you can’t make the payments, or you don’t agree with the child support order, then you may need to request a hearing.
Request an administrative hearing
If you disagree with the stated child support arrears, then you can request an administrative review of your case. During the review, you may be able to present evidence that supports your case.
File an injured spouse allocation form
If you are remarried and filing a joint tax return, the IRS cannot punish your spouse because of your child support debt. Filing an injured spouse claim will indicate that your spouse may experience undue financial hardship if your entire tax return is seized to pay child support.
By filing IRS Form 8379, Injured Spouse Allocation Form with the joint return, the Internal Revenue Service may be able to help reduce the impact of the federal tax offset. Your spouse may also use an injured spouse claim to help protect against seizure of tax refunds for:
- Unpaid taxes
- Unemployment compensation
Frequently asked questions
Can the state take my state income tax refund in addition to my federal income tax refund?
A state tax refund is also subject to garnishment to pay overdue child support payments.
Can I deduct my child support payments from my income tax returns?
No. Child support is not taxable income to the custodial parent, and child support payments are not tax deductible by the non-custodial parent.
In other words, there is no tax impact for child support payments.
What is an injured spouse?
An injured spouse is an uninvolved joint filer whose share of tax refund was allocated to pay the other spouse’s overdue debts, such as child support, income taxes, or overpaid unemployment compensation.
An injured spouse may request relief from the IRS by filing Form 8379-Injured Spouse Allocation.
Can I claim my child as a dependent or get tax credits because I’m paying child support?
As a non-custodial parent, there are certain tax credits that you may be eligible for, if your ex-spouse agrees to release the claim of exemption for the child.
To do this, you and your ex-spouse would file IRS Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. If your ex-spouse does not agree to this, and it is not written in the court order, then it is highly unlikely that you would be able to claim these credits.
After retiring from a 24-year career as a Naval officer in 2017, Forrest became a financial planner to help people achieve success in managing their personal finances. In 2022, he sold his partnership stake in his financial planning firm to focus on helping people full-time through his writing.
Featured in: Forrest’s writing has been featured in the following publications: Forbes, Military.com, NerdWallet, Yahoo Finance, The Military Guide, The Military Wallet, Christian Science Monitor, and many other publications.
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