Wisconsin Department of Children and Families

Protecting Children, Strengthening Families, Building Communities

 

 

Intercepting Tax Refunds

The Child Support program uses intercepted tax refunds to collect past-due child support, family support, maintenance (alimony), medical support, interest, fees, and other debts such as birth expenses.

Federal Tax Intercept Information State Tax Intercept Information

How Tax Intercept Works

  1. Child support mails a one-time notice to parents who owe past-due support the first year that child support reports the debt to the Internal Revenue Service (IRS) or the Wisconsin Department of Revenue (DOR). The notice includes information about appealing the intercept.
  2. If the parent pays off the debt, but the debt builds up again, child support will mail another notice to the parent.
  3. Child support sends the names of parents owing past-due support and the amount owed to the IRS and DOR.
  4. The payer's tax refund is sent to the Child Support Trust Fund and applied to the past-due child support debt.

Tax Intercept and Families Receiving Public Benefits/Assistance

  • Past-due support that builds up while a family receives cash benefits from W-2, SSI Caretaker Supplement, or Temporary Assistance for Needy Families (TANF) may be signed over to the state.
  • A child's birth costs paid by Medicaid and BadgerCare Plus programs are also signed over to the state for repayment.
  • Intercepted federal income tax refunds past-due support signed over to the state first, and then pay support owed to the family.
  • If the family no longer gets cash benefits, and no birth costs or TANF debts are owed, the family will get the intercepted federal income tax refund.

Important Information About Tax Intercept

  • The amount of past-due support owed is updated with the IRS and DOR regularly.
  • No matter how much past-due support a parent owes, the most that can be intercepted is the amount of the tax refund itself.
  • If the IRS or DOR recalls the intercepted tax refund, the parent who received the intercepted money must return the money to the Wisconsin Support Collections Trust Fund. Recalls can happen for a number of reasons, such as a mistake on a tax return. If the parent cannot repay all the money at once, half of all future support payments will be used to repay the recalled amount.
  • When the Trust Fund gets a federal tax intercept from a joint return, the paying parent gets immediate credit. The parent getting the payment will receive the money about six months later. This waiting period is to ensure that the money will not be recalled.
  • If a parent is certified for state tax intercept, lottery winnings may also be intercepted.
  • If a parent is certified for state tax intercept, payments from the Wisconsin Department of Administration may also be intercepted.
  • If a parent is certified for federal tax intercept for $2,500 or more, the parent will be denied a passport.