Child Support

• Taxpayers with an active garnishment order for past-due child support in any state may have their tax refund offset to pay the support. Custodial parents or legal guardians with an order of garnishment for past due child support must submit a claim for the IRS tax refund through a designated state agency. The state files the claim with the FMS. The FMS will fulfill the garnishment order with a partial or full offset of the income tax refund and remit the funds to the state agency. The state agency then remits the support payment to the custodial parent or legal guardian.
  
  

Taxes

• State income tax liabilities may also warrant an offset of a taxpayers IRS income tax refund. States can submit an order of garnishment to the FMS to have a portion or all of the tax refund taken to pay past due state taxes. Taxpayers can contact the state treasury in their state to find out whether the tax debt was submitted to the FMS for a tax refund offset.
  
  

Unemployment

• Your state of residence may also submit an offset claim for your federal tax refund if you owe the state debt related to unemployment compensation. If the state paid unemployment compensation due to fraud or if you owe contributions to the state fund for other reasons, your income tax refund may be garnished.
  
  

Nontax Debts

• Certain federal agency debt that is not related to taxes may be garnished from your IRS tax refund. Non-tax debt includes past due federal student loans, debts related to federal retirement plans, vendor payments, federal salary and Social Security benefits.
  
  

Notification

• If your IRS tax refund is offset for garnishments, the FMS is responsible for sending you a notice stating the amount of the refund and the amount of the offset along with the name, address and phone number of the agency receiving the garnished payment. Any tax refund that is left over after the garnishment will be sent to you.