Tax Offset Programs
In this Topic
Introduction
Tax intercept remedies provide for the interception of tax refunds for all NCPs with qualifying outstanding IV-D arrears for their cases. Please note that per Informational Transmittal 08-36, one-time payments such as Economic Stimulus payments will be handled like any other tax offset refund. Both federal and state tax refunds can be intercepted.
Note: The NCP must file a tax return for both federal and state income tax and must be due a refund in order for it to be offset.
The tables below show the selection and notification process for both federal and state tax offset.
Tax Offset Quick Reference for Selection Process
| Federal | State |
|
Arrears of at least $150 (TANF) |
Debt exceeds the amount payable over a one-month period. If arrears only, debt must be at least $25 (TANF) |
|
Arrears of at least $500 (non-TANF) |
Debt exceeds the amount payable over a one-month period. If arrears only, debt must be at least $25 (non-TANF) |
|
IV-D application on file |
IV-D application on file |
|
Selection is continuous |
Selection occurs during December or April |
Note: Alimony/spousal support arrears may be subject to collection through federal tax offset in conjunction with child support arrears. Alimony-only cases are not eligible for either federal or SOIL tax offset. FOP cannot apply to the MSO, while SOIL can apply to the MSO.
Tax Offset Quick Reference for Notification and Appeal Process
| Federal | State |
|
Pre-offset notices are sent by OCSS to the obligor as cases become eligible throughout the year |
Notification of offset sent by the Division of Taxation to obligor at the time the tax return is processed |
|
Appeal requests are sent directly to the local PCSE Unit |
Appeal requests are sent to the DFD and forwarded to the local PCSE Unit |
|
Appeals must be made within 30 days of notification |
Appeals must be made within 35 days of notification |
|
Appeals are tracked manually by the PCSE Unit and a review/hearing must take place within 30 working days of receipt |
Appeals are tracked and the PCSE Unit must conduct a review/hearing within 30 working days of receipt |
|
Injured spouse claims are processed by the IRS upon the filing of the Injured Spouse Allocation Form (8379) |
Injured spouse claims are processed by the DFD and through the Division of Taxation |
Note: Notices are sent to all eligible cases on the federal file in October, except those that have been noticed within the last 30 days.
For more information and guidance, please refer to IT-18-06: Bureau of Fiscal Service Offset Notice.
NJCSI Handout Materials
For more information and guidance, please refer to the following document:
Related Information
- 45 CFR 303.72
- N.J.S.A. 2A:17-56.16; N.J.S.A. 54A: 9-8.1
- New Jersey Administrative Code (N.J.A.C.) 10:110-15.2(a)(5)
- 45 CFR 303.72(h)(5)
- N.J.S.A. 2A:17-56.16