Tax Offset Information for Custodial Parents
Federal law and privacy restrictions prevent our office from discussing any specific information related to the non-custodial parents' taxes. However, the following provides general information about child support enforcement and the tax refund offset program:
1. How Child Support Cases are Submitted for Tax Refund Offset
In order for a non-custodial parent to be submitted for the state tax refund offset program, the amount of child support delinquency must be at least $150.00.
In order for a non-custodial parent to be submitted for the federal tax refund offset program, the amount of child support delinquency must be at least $150.00 in a Temporary Assistance for Needy Families (TANF) case and at least $500.00 in a Non-Temporary Assistance for Needy Families (TANF) case.
Both state and federal tax refund offsets are AUTOMATIC through Indiana's statewide child support computer database.
2. How Child Support Tax Refund Offsets are Processed
If a custodial parent is receiving TANF, both the state and federal tax refund offset amount will be held by the State of Indiana for reimbursement of TANF funds expended.
If a custodial parent is a former TANF recipient, and there are arrears owed to the State of Indiana, the state will keep the federal tax refund for reimbursement of TANF funds previously expended. However, the state tax refund will be paid through the normal distribution scheme for child support cases (e.g. current child support will be paid first, custodial parent arrears will be paid second and state arrears will be paid last).
Application of a tax refund offset is pro-rated between all of the non-custodial parent's cases, if no TANF arrearage exists.
3. Timeframes Associated with Tax Refund Offsets
Federal Tax Refund: Single, federal tax refunds are held by the state for 29 days and distributed on day 30. Joint, federal tax refunds are held by the state for 5 months and 29 days and distributed on the 30 th day of the 5 th month.
State Tax Refund : State tax refunds are submitted for offset automatically on the 28 th day of each month. State tax refund offsets will be applied to the current child support due as of the date the tax refund is submitted for offset collection. If the amount of the state tax refund is greater than the current child support due as of the date that it is submitted for collection, the remaining state tax refund amount will be applied to any existing child support arrearage.
4. Fees Associated with Tax Refund Offsets
An administrative fee of $14.65 will be deducted from the obligor prior to sending the federal tax refund offset to the obligee. The non-custodial parent is given credit for the full amount of the tax refund, despite the fact that this fee is withheld from the amount.