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Federal tax refund offset

The child support office can intercept a parent's federal tax refund to collect past due child support, also called arrears. The office can file a claim against any federal income tax refund a parent may receive whether it is delivered electronically, by mail or through a rapid refund program.

The child support office can do this when cases meet the following criteria.

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

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 the child support office has or will file a claim with the U.S. Department of Treasury for the amount of the 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.

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 a 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 other spouse'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.

Exclusions

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

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

Authority

State laws can be found on the Minnesota Office of the Revisor website.

  • 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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