What happens to your refund when you owe money
The IRS will intercept your federal tax refund if you owe back taxes, child support, student loans in default, or certain other debts. This is called offset, and it happens automatically — the IRS does not ask your permission first. The money goes to pay down what you owe, not back to you.
You cannot stop an offset that has already been processed. But you can prevent one before it happens, or recover money after it is taken, depending on what you owe and when you act.
Key Takeaways
- The IRS will offset your refund without notice if you owe federal taxes, child support, student loans in default, or certain other federal debts.
- You can prevent an offset by paying what you owe or setting up a payment plan before you file your return.
- If your refund has already been offset, you can request a reversal within two years if you can show the debt was paid, disputed, or no longer valid.
- Injured spouse relief lets you recover your share of a joint refund if only your spouse owes the debt.
- The IRS must send you a notice within 30 days of offsetting your refund, and you have the right to contest it.
Paying or arranging payment before you file
The simplest way to stop an offset is to settle the debt before tax season. If you owe back federal taxes, contact the IRS directly at 1-800-829-1040 or through your online IRS account. You can pay in full, or set up an installment agreement (a payment plan) that the IRS will honor even after you file.
If you owe child support or student loans in default, those debts are held by different agencies. Contact your state's child support enforcement office or your loan servicer to arrange payment or a plan. Once you have a written agreement in place, notify the IRS that the debt is being resolved — this does not always stop an offset automatically, but it creates a record that may help you recover the money later.
If you owe other federal debts (such as overpaid unemployment benefits or federal employee debts), contact the agency that holds the debt. The sooner you act, the better your chances of preventing the offset.
Requesting injured spouse relief on a joint return
If you file a joint return with a spouse and only your spouse owes a debt, you can recover your share of the refund through injured spouse relief. The IRS will offset the entire joint refund to pay your spouse's debt, but you are not responsible for their debt and should not lose your money.
File Form 8379 (Injured Spouse Allocation) with your tax return, or mail it to the IRS within three years of the original return due date if you have already filed. The IRS will review your return, calculate your share of the refund based on income and withholding, and send your portion back to you. Processing takes about 14 weeks after the IRS receives the form.
You will need to provide your spouse's Social Security number and details about the debt they owe. If you do not know what debt triggered the offset, call the IRS at 1-800-829-1040 and ask for a Notice of Federal Tax Levy — this document lists the specific debt.
Contesting an offset after it happens
If your refund has been offset and you believe the debt is not yours, was already paid, or is no longer valid, you can request a reversal. The IRS must send you a Notice of Offset within 30 days of taking the money. This notice explains what debt was offset and gives you instructions to request a hearing.
You have the right to a hearing before an IRS official who was not involved in the offset decision. Request the hearing in writing within 30 days of receiving the notice. Include any documents that support your case — proof of payment, a copy of a paid-off judgment, evidence that the debt belonged to someone else, or documentation that the statute of limitations has expired.
The hearing officer will review your evidence and the agency's records. If they find the debt was paid or invalid, the IRS will reverse the offset and return your refund. If they uphold the offset, you can appeal to the IRS Appeals Office within 30 days.
Recovering money offset for child support or student loans
Child support and student loan offsets follow different rules than tax debt offsets. For child support, contact your state's child support enforcement office. If you believe the debt is incorrect or has been paid, ask for a review. Some states allow you to request a hearing to contest the offset.
For federal student loans in default, contact the loan servicer or the U.S. Department of Education's Federal Student Aid office at 1-800-621-3115. If you have since brought the loan current or entered a repayment plan, the servicer may be able to stop future offsets. Past offsets are harder to reverse, but you can request a review if you have proof the debt was resolved.
For other federal debts (such as overpaid unemployment or federal employee debts), contact the agency that holds the debt. Ask whether the debt can be disputed or whether you have a right to a hearing.
Tracking your offset status
After the IRS offsets your refund, you can check the status through your online IRS account at irs.gov. Log in, select "View Your Tax Account," and look for offset information under "Refunds." The account will show the date the offset occurred and the amount taken.
If you filed Form 8379 for injured spouse relief, you can track its progress the same way. The IRS will update your account as the form is processed.
If you requested a hearing to contest the offset, the IRS will send you a hearing notice by mail with a date and instructions. Keep all notices and correspondence in a file — you will need them if you appeal.
What to do if you cannot pay the debt
If you owe back taxes and cannot pay in full, the IRS offers several options that may stop or delay an offset. An installment agreement lets you pay over time; once approved, the IRS will not offset future refunds as long as you stay current on payments. A Currently Not Collectible status temporarily pauses collection action, including offsets, if you are in severe financial hardship.
To request either option, call 1-800-829-1040 or use your online IRS account. You will need to provide financial information showing your income, expenses, and assets. The IRS will review your situation and decide whether to approve the request.
If you owe child support and cannot pay, contact your state's child support enforcement office about a modification of your support order. If your circumstances have changed significantly, the office may lower the amount you owe, which could reduce future offsets.
Frequently Asked Questions
Can the IRS offset my refund without telling me first?
Yes. The IRS offsets refunds automatically if you owe certain debts. You will receive a Notice of Offset within 30 days of the offset, but the money is taken before the notice arrives. This is why acting before you file is the most effective way to prevent an offset.
How long does it take to get my money back after I dispute an offset?
If you request a hearing and the hearing officer rules in your favor, the IRS typically reverses the offset within 30 to 60 days. If you appeal and win at the Appeals Office, the timeline extends to several months. During this time, the money remains with the government.
Will setting up a payment plan stop my refund from being offset?
A payment plan may prevent future offsets if you stay current on payments, but it usually does not stop an offset that has already been processed. The best time to set up a plan is before you file your return, so the IRS knows you are resolving the debt.
What if my spouse owes the debt but I filed a joint return?
File Form 8379 (Injured Spouse Allocation) to recover your share of the refund. The IRS will separate your income and withholding from your spouse's and return your portion. Processing takes about 14 weeks.
Can I stop an offset for a debt I do not recognize?
Yes. Request a hearing within 30 days of receiving the Notice of Offset and bring evidence that the debt is not yours or has been paid. The hearing officer will review the case. If you win, the IRS will reverse the offset and return your refund.