As tax time rapidly approaches, many will anxiously await an expected tax refund. If, however, they owe past-due child support, there is the possibility that there will be a tax refund offset that will collect what is owed from their refund. For noncustodial parents who are facing this reality, it is important to understand what the tax refund offset program is. If there is a dispute over child support or any other issue related to a divorce, having legal advice is key.
The tax refund offset program can impact the federal and state income tax refunds. This is done by certifying the past due amount to the Internal Revenue Service and the New York State Department of Taxation and Finance. This can also impact spousal support if that is also past due. For cases that are eligible to be part of the tax refund offset, there will be a Special Notice sent to the noncustodial parent stating how much is owed in past due child support.
It will be up to a certain date. In general, it is until late August of the previous year. When there is an expected tax refund, some or all of it can be taken as an offset to pay what is owed. The amount that is deducted via tax refund offset might be different from what the Special Notice says since there can be changes in the amount that is owed after it was mailed. It is important to remember that even if the noncustodial parent is paying child support when the case has been certified, it will not stop the state from using the tax refund offset to collect what is past due.
The tax refund offset can be an unwelcome surprise to a noncustodial parent who believes he or she is set to receive an IRS and DTF refund. While it is inadvisable to fall behind on child support payments, circumstances such as job loss or other financial issues can prevent a parent from paying what he or she owes. It is possible to have a child support order modified if that is the case. If there are other concerns, rather than not paying, it is imperative to discuss the case with an experienced attorney who understands all aspects of divorce, child support, spousal support and other divorce legal issues to avoid the tax refund offset.