How Can I Prevent My Tax Refund From Being Intercepted For Outstanding Child Support?

By March 17, 2020Family Law Blog

If you are ordered to pay child support under California Family Code section 3900, the parent receiving the payment has the right to have the order enforced through interception of tax refunds.

If you are the parent paying support and have or fear you are about to fall into arrears on paying, it’s important to know that since 1993 the State of California Franchise Tax Board (FTB) has been given the authority to enforce child support orders through state and federal tax refund interception.

Other consequences for falling behind include having your wages intercepted, being charged with a misdemeanor, revocation of your driver’s license, and an increase in monthly ordered support.

How the Law is Applied

The FTB currently manages all child support collection in California. If you’re a state resident and fall behind in child support payments, the FTB and IRS will work with one another to ensure you contribute the court-ordered monies. If you receive a “Demand for Payment” from the FTB, you have 10 days to pay the past-due amount before the IRS gets involved. If you do not pay, you risk losing your tax refund.

There are several ways the FTB identifies and reports child support arrears:

  • Your state refund is intercepted as soon as you’re $100 past due.
  • When you fall behind by $500 the IRS is notified.
  • If your child receives public assistance from the State of California, the law allows the FTB to notify the IRS when the arrearage is $150.

Notice of Demand

The FTB’s Demand for Payment requires that you pay the entire outstanding amount within 10 days. It is not enough to make a partial payment. If you’re unable to make full payment, a notice will be sent to the IRS to intercept your refund. You’ll then receive a notice from the IRS explaining why you won’t receive your tax refund or how much will be taken out to cover the amount in arrears.

If you’ve already received your refund for last year’s taxes, the FTB continues to send monthly notices regarding your account. If you’re able to pay your arrears before you file your next tax return, nothing will happen. Otherwise, once you file, your IRS account will be flagged, and all refunds will be used to satisfy your outstanding debt. There is no statute of limitations.

What You Can Do

Please keep in mind that it is not true that if you are late in your child support payments you will not be permitted to see your child.

If you’re behind in child support or believe you will be, your first step should be to talk to an experienced family law attorney who understands that child support obligations can become an overwhelming problem that can hurt both your financial standing and the welfare of your child. You do have options, including requesting a modification in child support or setting up an affordable payment plan.

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