On this blog, we post frequently on family law matters, including child support. In a recent post, we discussed modifying child support orders in New Jersey.
These child support modifications can be financial life savers if you lose your income or have a drastic loss of income. It is best to not fall behind on your child support obligations. You could face stiff penalties, including losing your tax refund.
I could lose my tax refund?
Yes. In addition, to other consequences of unpaid child support, your federal tax refund could be seized by the Internal Revenue Service to pay off or pay down your unpaid New Jersey child support balance.
Federal Income Tax Refund Offset Program
The program is called the Federal Income Tax Refund Offset Program. The state where you owe child support refers delinquent child support accounts to the IRS. Next, the IRS sends a Pre-Offset Notice to the non-custodial parent who owes child support.
After the federal refund is taken (offset), the non-custodial parent will receive an Offset Notice with the amount taken.
Each time your federal refund is taken, you will receive an Offset Notice, but you will only get one Pre-Offset Notice for each balance owed. This means that, if you have back child support from multiple states or for multiple kids, you will receive one Pre-Offset Notice for each, but the IRS may take multiple refunds. The offsets will continue until you no longer owe a child support balance.
You can appeal both your inclusion into the Federal Income Tax Refund Offset Program and any subsequent offset amount. On the Pre-Offset Notice and the Offset Notice, the administrative appeal information is included.
You can appeal each offset amount, and if you file a joint return, your spouse can request a partial refund as well. The spouse will need to file IRS form 8379-Injured Spouse Claim and Allocation to the IRS office listed on the Offset Notice.
Avoid this entirely
For those who are falling behind on your bills, you may qualify for a child support modification. Contact your divorce and family law attorney before you fall behind to ensure that you can avoid this entirely.