Case management services

Monitoring & enforcing child support orders

Intercepting federal tax refunds

Federal tax refunds are intercepted if the case meets all three conditions below:

  1. The past-due support/debts on a court case are $500 or more – OR – if any amount of the past-due support/debt is “assigned,” the past-due support/debts on a court case are $150 or more.
  2. The child support agency knows the Social Security number or Tax Identification number (TIN) of the parent who owes past-due support.
  3. The parent who receives support gets case management services from his or her local child support agency.

If the three conditions above are met, the paying parent is "certified" for federal tax intercept. When certified for federal tax intercept for $2,500 or more, the parent cannot get a passport or have a passport renewed until the entire debt is paid in full.

Who gets the federal tax return?

The Federal Tax Intercept collection first pays past-due support that is assigned, then pays past-due support owed to the family. Families who received cash benefits in the past will get part of the assigned past-due support. After past-due support and debts are paid off, any remaining refund is returned to the paying parent.

Example 1

After paying the assigned past-due support, $300 is left of the federal tax intercept. The parent owes $500 in past-due support to Family A & owes $750 in past-due support to Family B.

  • The debt to Family A is 40% of the past-due support. Family A would receive $120 of the remaining $300.
  • The debt to Family B is 60% of the past-due support. Family B would receive $180.

Example 2

The paying parent owes $600 in past-due support.  The parent's federal tax refund is $800. After paying the $600 in past-due support, the remaining $200 is sent to the paying parent.

Timing & Holds

The IRS takes the past-due support out of the paying parent’s federal tax refund. The U.S. Treasury will mail a letter to the paying parent stating how much they intercepted and where the money was sent. The Trust Fund usually gets the tax intercept four to five weeks after the paying parent receives the U.S. Treasury letter.

Holds

  • Refunds intercepted from Federal Joint Returns are held for six months. The hold protects the parent who receives the money from having to repay intercepted refunds if the IRS changes the refund. This hold does not guarantee that the IRS will not recall the intercepted refund at a later time. After the six-month hold, the Trust Fund sends the money to the parent receiving support (to the parent's debit card or direct deposit account).

    The paying parent gets credit for the payment immediately.
  • Refunds intercepted from Federal Non-Joint Returns are not held.

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Updated July 31, 2009

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