Losing your tax refund due to unpaid child support

On Behalf of | Jul 17, 2023 | Child And Spousal Support

From license suspension to passport denial, it is crucial to understand the penalties you could face if you do not stay current on child support. In fact, you could even lose your federal tax refund if you fall behind on these obligations.

The interception of your tax refund could create additional financial complications in your life, especially if you plan on using your refund to cover debts, pay bills or take care of other financial obligations.

Child support and tax refund offset

The Administration for Children and Families addresses tax refund offset as a result of back child support. According to the ACF, state agencies inform the federal government when non-custodial parents fail to pay child support on time. If arrears exceed a certain amount, the non-custodial parent receives a notice.

After the non-custodial parent’s tax refund becomes processed, the government intercepts the payment and sends money to the state’s child support agency to cover unpaid child support. Depending on how much back child support you owe, you could lose some or all of your federal refund.

Paying child support to prevent the loss of your tax refund

If you owe back child support, familiarize yourself with all options on the table. Depending on your circumstances, you might have the option to modify your child support order if your financial situation has changed.

Furthermore, you could have the ability to set up a payment plan with the state. Changing your spending habits and saving money could also help you avoid tax refund offset due to back child support.

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