(1) What is the Tax Refund Offset Program?
If a taxpayer owes past-due child support of
$150 or more, the Tax Refund Offset Program
can intercept both state and federal income tax
refunds that are due the taxpayer. The program
is a coordinated effort of the Internal Revenue
Service, the US Department of Treasury’s
Financial Management Services, the federal
Office of Child Support Enforcement, the Office
of Child Support within the Michigan
Department of Human Services (DHS), the
Michigan Department of Treasury, and all local
friend of the court (FOC) offices.
(2) How does the Tax Refund Offset Program
work?
If a child support case meets certain federal and
state requirements, a local FOC office may
intercept a support payer’s state and federal
income tax refunds and apply them to the
payer’s overdue support obligation.
Medical support, like regular child support, is
also eligible for collection by a tax refund offset
if a court order has established the exact amount
owed for the medical support.
(3) Does my case qualify for the Tax Refund
Offset Program?
Cases will qualify for a tax refund offset if the
total amount of the arrearages that the payer
owes has accumulated to over a certain threshold
amount. This threshold amount varies on the
basis of whether the support amount in arrears is
due to be paid to the state or to an individual. If
the support payee has ever received public
assistance (i.e. TANF – Temporary Assistance
to Needy Families Independence Program), any
child support amounts that were due during the
period that the payee received TANF is then
actually owed to the state.
If the payer owes more than $150 in stateassigned
arrearages, federal law allows a federal
tax refund offset.
If the payer owes more than $500 in arrearages
to an individual, federal law allows a federal tax
refund offset.
If the paying parent owes more than $150 in
arrearages to either an individual or to the state,
then state law allows a state tax refund offset.
(4) I am supposed to receive child support
payments. Must I do anything to ensure that
my case qualifies for the Tax Refund Offset
Program?
All cases in which a family has received TANF
payments (public assistance) are automatically
eligible for the tax refund offset program. If you
have never received TANF benefits, you should
check with your local FOC office to see if you
have previously signed an application that
requested IV-D services. Almost all parents
request services when they complete the initial
paperwork for their court case. If you have not,
simply request an IV-D application from the
FOC office, or from a support specialist at the
DHS Office of Child Support. You may contact
that office at 517-373-7570.
(5) How does a child support payer know that
the FOC office has requested a tax refund
offset?
The FOC or the Office of Child Support
Enforcement (OCSE) sends the support payer a
pre-offset written notice that a tax offset has
been requested. This notice states the amount
owed, provides information regarding the
administrative appeal procedure, and discusses
options to be used by individuals who filed joint
tax returns.
(6) When does a payee receive the money
from the tax refund offset?
When the support payer owes past-due support
to the state on any child support case, money
received from federal tax refunds is used first to
eliminate the payer’s arrearages that are due the
state. Any remaining money from a federal tax
refund then goes to the individual payee. With
state tax refunds, if the individual payee is not
currently receiving TANF benefits, the offset
money from state tax refunds is applied first to
pay current support, and then applied to cover
any past-due support owed to the individual
payee.
(7) May the support payer appeal the tax
refund offset?
Yes. The payer may request an administrative
review of the offset request by following the
instructions noted in the pre-offset notice that
was sent by the FOC or OCSE. In addition,
after the income tax refund is intercepted, the
IRS or the state taxing authority sends the payer
a second offset notice. This notice, too, contains
information about how to request a review. The
payer may appeal only by showing that he or she
is not the person who owes support, or that the
amount owed is wrong. In addition, if the
support payer and a current spouse have filed a
joint tax return, the current spouse may file an
injured spouse claim – a claim stating that a
portion of the intercepted tax refund was based
on the current spouse’s income and should not
have been offset to pay the payer’s child
support.
(8) Other important information regarding
the Tax Refund Offset Program.
If the support payer files a joint federal tax
return, federal law allows the FOC to hold the
tax refund offset money for six months before it
sends the money to the payee. That time period
allows the payer’s spouse an opportunity to file
the injured spouse claim mentioned above. As a
result of that federal guidance, the custodial
party may not receive the offset money until
slightly more than six months after the FOC
receives the tax offset payment. The payer will
receive credit for the payment during this six
month period.
For more information about the Tax Refund
Offset Program, please contact the local FOC
office that is handling your case.