For those non-custodial parents who have a child support order to pay, you know there are consequences of non-payment. One such consequence that is not well known is that your federal tax refund can be intercepted to pay back child support.
The Federal Income Tax Refund Offset Program
Under the Federal Income Tax Refund Offset Program, once California authorities notify the IRS that you owe back child support (arrearage), the IRS will take any refund you receive from the federal government until that back child support is fully paid.
How will I know?
Prior to losing your refund, you will receive a Pre-Offset Notice, and once a refund is actually taken, you will receive an Offset Notice. You will only receive one Pre-Offset Notice no matter the number of refunds that will be taken. Remember, refunds will keep being offset until your back child support owed is fully paid.
While you may only receive one Pre-Offset Notice, you may receive multiple Offset Notices.
How much do I need to owe?
The thresholds for qualifying for the Federal Income Tax Refund Offset Program are extremely low. The basic requirement is $500 of back child support, which is usually only one or two months.
However, if the custodial parent receives federal benefits for low-income families, that threshold lowers to $150. This means that you could lose your refund well before any other consequence occurs for nonpayment of child support.
Avoid this upfront
Once you know that you are likely going to fall behind on your child support obligations, contact your California family law attorney to let them know. They may be able to help you file a request for a child support modification to reflect your changed financial circumstances.
A modification can help you avoid the consequences of unpaid child support. After all, if the court does not know you lost your ability to pay, it will assume you are simply choosing not to pay.