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.
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:
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.
The pre-offset notice explains:
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.
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:
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.
There are several ways to avoid having your income tax refund seized to pay child support
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:
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.
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.
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:
In other words, there is no tax impact for child support payments.
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.
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.