Can Child Support Be Collected from Tax Refunds?

The short answer: Yes. The IRS can deduct part of, or all of, your tax refund money to settle child support arrears. 

Family law gives the state and federal governments the full right to intercept your funds and ensure that the child is taken care of. This happens through the Federal Tax Refund Offset Program

How Does It Work?

Child support agencies at the state level share the names and social security numbers of people who are extremely late on their child support payments with the Department of Treasury. The names are checked for case eligibility and parents who owe the state child support, receive a notification of their arrears. 

The Pre-Offset Notice has all the information that you need to take the necessary measurements if you do not wish a cut on your tax refunds. This includes the following:

  • amount owed to the state
  • explanation of the tax refund intercepting process
  • information on the Federal Tax Refund Offset Program
  • other measures that the child support agencies can impose should your arrears accrue 

There is also an option to challenge the debt amount.

If the notice goes unanswered, the entire process takes two to three weeks, after which the child support money is wired to the custodial parent. However, this process might take up to six painful months if the paying account is joint.

The amount deducted from your tax refund might not match with that on the Pre-Offset Notice, but that is normal. Status updates on child support obligations may change from now and then without reflecting on the notice.

It is also important to note that these tax refunds intercepts do not necessarily end when the child turns 18 years old. Federal law changes in 2017 clarified that your child support obligations end when you have cleared the agreed amount. 

I Have Received the Pre-Offset Notice. What Do I Do?

The Treasury Department sends a notification beforehand to avert the consequences of accruing child support arrears, including a deduction from total tax refunds received. Ultimately, the most effective solution is paying child support on time and in agreed amounts.

However, if you have lost your source of income or cannot pay the amount for logical reasons, here are some proactive actions you can take:

  • Talk with your state child support agency about accommodating your current situation.
  • Write to the court of appeals requesting an adjustment of the child support amount based on your current income status.
  • File for bankruptcy (Chapter 13): If you have lost your job and cannot keep up with the payments, file for bankruptcy. While this does not slash the child support amount, it can help you restructure the arrangement so that you pay the same amount but over a longer period. 

How Do I Benefit from the Federal Tax Refund Offset Program?

If someone owes you child support and is late on their payments, the Federal Tax Refund Offset Program can save you direct confrontations and back and forth to court sessions. 

However, you need to file a court petition first, requesting the state child support enforcement agency to take over the collection of child support from the non-custodial parent on the kid’s behalf. From this point forward, the agency will automatically facilitate a tax refund deductions should the arrears accrue.  

The amount in arrears will also determine whether the Department of Treasury will forward the owing parent’s name to its financial management service. 

If your child is a beneficiary of the Temporary Assistance for Needy Families program, the amount owed must be $150 and above. For non-beneficiaries, the minimum arrears amount is $500.