How does a federal tax refund offset work?

State child support agencies work through OCSS to submit information about people who are behind in child support payments.  This information is sent to the Department of the Treasury and includes the name, Social Security number, and past-due child support amounts.

Notification to the noncustodial parent
If the child support debt meets the federal requirements for a federal tax refund offset, the noncustodial parent will receive a Pre-Offset Notice that explains why their case was submitted to the offset program. It shows the past-due support amount owed at the time of notice. The Pre-Offset Notice includes information about federal tax refund offset, administrative offset, passport denial, and other actions the child support agency may take to enforce or collect a past-due amount, and also how to challenge the debt and request an administrative review.

Sending the payment
When Treasury’s Bureau of the Fiscal Service processes a tax refund, it matches the noncustodial parent’s debt and intercepts part or all of the tax refund, depending on how much is owed. Working through OCSS, the offset payment is then sent to the state child support agency to pay toward the past-due support. At the time of the tax refund offset, Treasury’s Bureau of the Fiscal Service mails a Notice of Offset to the noncustodial parent stating that all or part of their federal tax refund has been intercepted. The Notice also provides direction on contacting the child support agency for further information.

Note: The state updates the debt amount regularly but may not issue a new Notice each time the debt amount changes. For that reason, the actual amount that is deducted from the noncustodial parent’s tax refund may differ from the amount on the Notice.

Timeframes for receiving and sending funds
Typically, the state child support office that submitted the noncustodial parent’s case for tax refund offset receives the funds within two to three weeks. It is important to stay informed with your local child support caseworker.

• Non-joint refund: Federal law requires a state to disburse a non-joint refund offset no later than 30 calendar days after receipt unless there is a special circumstance (for example, a pending appeal).
• Joint refund: State may hold the tax refund offset from a joint tax return for up to six months before disbursing (on rare occasions, a state may need to hold a joint refund offset for more than six months).