Federal Tax Offset Process
An obligor (the person ordered to pay child support) will be submitted to the IRS for federal tax offset when the balance on a IV-D case reaches $500 owed to the custodial parent and/or $150 owed to the State of Ohio (multiple cases will be combined to reach the threshold). The obligor will receive an offset notice from the IRS once the case meets the above criteria.
Cases are added, deleted, and modified on a weekly basis. Once the arrears reach $2,500, the obligor will be denied a passport. If the balance falls below the threshold, the obligor will be automatically deleted. Joint returns will be placed on hold for six months.
State Offset criteria
The non-custodial parent cannot have filed for bankruptcy before October 17, 2005. If the non-custodial parent filed after this date, they are eligible pursuant to Congress’ passage of the Bankruptcy Abuse Prevention Consumer Protection Act of 2005.
A minimum of $150 (either to the family or the State of Ohio) must be owed to be eligible. If the non-custodial parent has more than one case, all arrears are combined and must meet the $150 submittal criteria. The case must be eligible for at least 90 days after a notice is sent to the non-custodial parent, advising them that the case meets the minimum criteria.
Tax Offset FAQ
If your state tax refund is being intercepted, you will receive a Notice of Ohio Income Tax Refund Offset for Overdue Support. This notice provides instructions on how to request a tax offset review, if you want to dispute the offset. If no deletion occurs 90 days after the initial submittal date, the tax refund is eligible for offset.
Submission of eligible cases is usually made at the end of September, to the Ohio Department of Taxation. If the case does not meet the criteria for submission in September, the case will not qualify for state tax offset that year.
It takes 30-45 days after collection is received to be processed. State tax refunds allocate to current support first, then to child support arrears.