Federal law allows for offsets of federal income tax refunds on past due support owed. The Federal Tax Refund Offset Program collects past due child support from the tax refunds of parents who have been ordered to pay child support. This program is a cooperative effort between the Internal Revenue Service (IRS), the Federal Office of Child Support Enforcement (OCSE), and the State’s child support office, the Division of Child Support Enforcement (DCSE).
Any federal or state tax refund or credit as determined by the Department of Revenue can be intercepted. An example of a credit would be a Homestead Credit Refund.
Federal distribution rules require that money received through federal tax intercept be applied first to arrears owed the State. If any child support arrearages are owed to the State for assistance payments made to the family, that money has to be repaid first before money that is owed to the family is repaid.
The child support agency of the state may intercept a tax refund when amounts are owed to the state, to the former spouse, or to the other parent.
A recipient of child support or maintenance payments can apply for the interception of any tax refund from the payer. All you have to do is file a request with the child support agency of the county where the court order for support or maintenance was entered. There's a small fee for making that application. Any federal or state tax refund then will be certified for interception.
Usually you have to apply around August/September for the next year's tax return. If there's a tax refund to intercept, you'll receive the money the following summer.
Under certain state statutes, the obligated party may request an administrative review with the division of child support enforcement(DCSE). Documentation must be provided to support the arrears balance dispute along with the request within the statutory timeframe. Written advanced notices called Pre-Offset notices are mailed to the obligated party each October, and includes the procedures and timeframes on requesting an administrative review. A request for an administrative review form can be obtained by contacting DCSE Customer Service or from their website.