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Ability to Offset Past-Due Child Support Against Tax Refunds

Where an arrearage of child support has been determined, a child support enforcement agency may intercept the tax refund of the delinquent parent.

Tax Intercept Program

Both federal and state tax refunds for taxpayers who owe back child support payments may be intercepted by state child support enforcement agencies and used to pay toward or pay off the arrearage. The notice to the Secretary of the Treasury for the intercept shall include information identifying the taxpayer and the amount of the arrearage. When a request is made to the Secretary of the Treasury to intercept a tax refund, the state agency is required to notify the taxpayer of the request for an intercept and provide information on how the taxpayer can protest the intercept. Withholding is to be used only when it appears that, based on the pattern of child support payments, the taxpayer will owe an arrearage of $500 or more at the time the tax refund will be intercepted. The fee which the Secretary of the Treasury may impose to cover the costs of the withholding and notification may not exceed $25 per case submitted.

Protest of a Tax Intercept

A taxpayer can protest the intercept of a federal tax refund in respect to whether he is the person who is responsible for paying child support, whether there is an arrearage, and the amount of any arrearage. If the taxpayer filed a joint tax return with his or her current spouse, the spouse is entitled to receive her share of the tax refund. A protest should initially be considered by the state child support enforcement agency. If the taxpayer disputes its findings, the court in the state in which the state agency is located is the court with jurisdiction to consider the matter.

Application for a Tax Intercept

Only the state agency responsible for enforcing child support has authority to initiate a tax refund intercept. The recipient of child support may not request an intercept directly from the Secretary of the Treasury. If the recipient wants to intercept a tax refund, the recipient is required to first register for services with the state child support enforcement agency.