Federal tax refund offset

State law requires the child support office to charge the custodial parent a $25 fee when the federal tax refund offset is more than $100 and is applied to nonpublic assistance arrears. The fee is deducted from the amount collected before sending the payment to the custodial parent. If multiple cases are involved, the child support office charges the $25 fee for each case that meets the criteria.

When the arrears owed to the custodial parent are eligible for an offset, the child support office sends the custodial parent a Notice of Federal Tax Intercept Fee.

When the child support office receives the offset funds, it first applies the money to all of the parent's cases that have arrears owed to the state and qualify for a federal tax refund offset. After paying all the arrears owed to the state, if there is an amount remaining, The remainder of the payment will pro-rate between the arrears owed to the custodial parent who qualified for federal tax refund offset. The office may hold the funds for up to six months before releasing a payment to the custodial parent.

Single returns
The state child support office holds funds received from the offset of a single federal tax refund for arrears owed to the custodial parent for 30 days before releasing to the custodial parent.

Joint returns
The state child support office holds funds received from the offset of a joint federal tax refund for six months to allow time for the non-obligated spouse of the parent who owes arrears to file an Injured Spouse Claim with the Internal Revenue Service (IRS).

If the parent who owes arrears filed a joint tax return with a spouse, the non-obligated spouse can file an Injured Spouse Claim. The claim prorates refunds from joint tax returns so the non-obligated spouse's portion of the refund is not used to pay the other spouse's child support obligation.

The non-obligated spouse must file IRS Form 8379 to claim their portion of the refund. For questions about this form, call the IRS at 800-829-1040.

The child support office will not take a parent's federal tax refund if any of the following is true:

• The case does not meet the criteria
• A court order prohibits the use of federal tax refund offset.

State laws can be found on the Minnesota Office of the Revisor website.

U.S. Code of Federal Regulations

• 31 Code of Federal Regulations, section 285.3
• 45 Code of Federal Regulations, section 302.60
• 45 Code of Federal Regulations, section 303.6(c)(3)
• 45 Code of Federal Regulations, section 303.72
• 11 United States Code, section 362(b)(2)(F)
• 26 United States Code, section 6402(c)
• 31 United States Code, section 3720A
• 42 United States Code, section 652(b) and (c)
• 42 United States Code, section 664
• Minnesota Statutes Section 518A.51(f)