Are Tax Offsets Suspended in 2021?

Yes, tax offsets were temporarily suspended until July 31, 2021. This suspension applied to all federal and state debts, including tax debts.

What is a Tax Offset?

A tax offset is a legal procedure that allows the government to collect unpaid taxes by taking money from your tax refund or other federal payments.

Why Were Tax Offsets Suspended?

The suspension of tax offsets was part of the government’s response to the COVID-19 pandemic. The suspension was intended to provide financial relief to individuals and families who were struggling financially during the pandemic.

What Debts Were Not Subject to the Suspension?

The suspension of tax offsets did not apply to all debts. The following debts were still subject to offset:

  • Delinquent child support obligations
  • Federal nontax debts, such as student loans and Medicare overpayments
  • State debts, such as unpaid parking tickets and court fines

What if I Owe a Debt that Was Not Subject to the Suspension?

If you owe a debt that was not subject to the suspension, the government may still be able to offset your tax refund or other federal payments. You should contact the agency that you owe the debt to to discuss your payment options.

Has the Suspension of Tax Offsets Been Extended?

No, the suspension of tax offsets has not been extended. The suspension ended on July 31, 2021.

What Should I Do if I Have Questions About Tax Offsets?

If you have questions about tax offsets, you should contact the Internal Revenue Service (IRS) at 1-800-829-1040.

The suspension of tax offsets provided financial relief to many individuals and families during the COVID-19 pandemic. However, the suspension has ended, and the government may now offset your tax refund or other federal payments to collect unpaid debts. If you have questions about tax offsets, you should contact the IRS.

Tax Offset vs Deductions, how they work


Is the IRS still offsetting refunds?

Why is my refund different than the amount on the tax return I filed? (updated December 22, 2023) All or part of your refund may be offset to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.

Is the Treasury Offset Program suspended?

To inform staff that Franchise Tax Board (FTB), in keeping with the Governor Gavin Newsom’s March 12, 2020 executive order, has temporarily suspended the collection activities of the Interagency Intercept Collections (IIC) , Federal Treasury Offset Program (FTOP) & Multi-offset Programs (MOP) through July 31, 2021, to …

Can a tax offset be stopped?

If your debt has been paid in full, or if you do not owe the debt for other reasons, IDES is responsible for instructing Treasury to stop the offset process.

How do I know if I have a tax refund offset?

BFS will send you a notice if an offset occurs. The notice will reflect the original refund amount, your offset amount, the agency receiving the payment, and the address and telephone number of the agency. BFS will notify the IRS of the amount taken from your refund once your refund date has passed.

Can a 2021 tax refund be offset?

For example, the taxpayer has an offer accepted on November 15, 2021. They file their 2021 tax return on April 15, 2022 showing a refund. Under the new policy, the IRS will not offset that refund, allowing the taxpayer to receive the refund.

Does the IRS offset tax refunds?

The IRS policy has been to offset tax refunds for tax periods extending through the calendar year in which the OIC is accepted. For example, a taxpayer has an offer accepted on November 15, 2020. They file their 2020 tax return on April 15, 2021 showing a refund (overpayment). The IRS applies that refund to the tax liability.

Will my tax refunds be offset if I file a 2020 tax return?

Your tax refunds won’t be offset if you filed your 2020 federal tax return between March 13th, 2020, and September 30, 2021. Additionally, the 3 stimulus checks sent by the federal government were exempt from the Treasury Offset Program.

What offset requests have been suspended?

This year, most of the offset requests that had been suspended through July 31, 2021, include: IRS refunds (including federal Economic Impact Payment checks) Transfers of state income tax refund to or from a partner state As of August 1, 2021, all three of these offset programs have resumed.

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