Tax Refund Offset for Custodial Parents

Federal law prevents our office from discussing specific tax offset information about your case with you. However, the following provides general information about the program.

How Cases are Submitted for Tax Refund Offset:

• In order to be submitted for the state refund offset program, the amount of the child support delinquency must be at least $150.00.
• In order to be submitted for federal refund offset program, the amount of the child support delinquency must be at least $150.00 in a TANF case and $500.00 in a non-TANF case.
• Tax refund offset submissions are automatic through our state-wide computer system.

How the Offsets are Processed:

• If the custodial parent is receiving TANF, both the federal and state refund will be held by the State for reimbursement of TANF funds expended.
• If the custodial parent is a former TANF recipient, and there are arrears owed to the State, the State will keep the federal refund for reimbursement, but the state refund will be paid through the normal distribution scheme, i.e., current support first, then CP arrears, followed by state arrears.
• Application of the tax refund offset is distributed to the oldest child support case first.

Timeframes Associated with Tax Refunds:

• Federal: Single returns are held for 29 days, then distributed on day 30, and joint returns are held for 5 months and 29 days, then distributed.
• State: The tax offset is applied once per month, on the 28th of the month. State taxes received will apply to any current support due as of that date. If the amount of the state offset received is more than the current support due, the remaining state tax would apply to arrears. Then arrears portion goes into the same “hold time” that a single federal return does (29 days). The rest of the state offset will then distribute on the 30th day.

Fees Associated with the Tax Refund Offset:

• An administrative fee of $25.00 will be deducted prior to sending the federal offset to the obligee.
• Obligor is given credit for the full amount of the federal tax offset despite the fee that was withheld.

Tax Refund Offset for Non-Custodial Parents

How Cases are Submitted for Tax Refund Offset:

• In order to be submitted for the state refund offset program, the amount of the child support delinquency must be at least $150.00.
• In order to be submitted for the federal refund offset program, the amount of the child support delinquency must be at least $150.00 in a TANF case and $500.00 in a non-TANF case.
• Tax refund offset submissions are automatic through our state-wide computer system.

How to Dispute the Tax Offset Submission:

• To dispute a state offset submission, you must write to the Child Support Bureau at:

  Indiana Department of Child Services, Child Support Bureau, Room W360 – MS #11, 402 West Washington St., Indianapolis, Indiana 46204-2739

  You must mail your written request for an administrative hearing within thirty (30) days from the date on your State Offset Notice. You must include a copy of the State Offset Notice with your request.
• To dispute a federal offset submission, you must write to the local child support office that certified you for tax offset. You must include a written request for a review along with the Federal Offset Notice you received, and the documentation showing that the submitted amount was incorrect. Examples of such documentation are court orders, payment printouts, etc. Your caseworkers will conduct a review with thirty (30) days of your request. You will be notified by mail of the result of the review.

How to File an Injured Spouse Claim and Allocation:

• There is no Injury Spouse Claim and Allocation form for state tax offsets. Instead, the spouse may request the return of his/her share of the joint return by spending a written request within thirty (30) days from the date on the obligor’s State Offset Notice. The request must include the social security numbers of both parties as they appear on the tax form along with the spouse’s telephone number. The request should be mailed to:

  Indiana Department of Child Services, Child Support Bureau, Room W360 – MS #11, 402 West Washington St., Indianapolis, Indiana 46204-2739

  To file an Injured Spouse Claim for federal tax offset, your spouse must file a form 8379. These forms are available at www.irs.gov or by calling the IRS at 1-800-829-3676