FAQs on Economic Impact (Stimulus) Payments and the Treasury Offset Program

On March 13, 2020, the President of the United States declared a national emergency due to the COVID-19 pandemic. MDHS has received information from the Treasury Offset Program (TOP), which collects federal nontax and state debts, and MDHS has prepared the following frequently asked questions (FAQs) to address inquiries during this crisis. These FAQs are based on information available to MDHS at this time, and MDHS will update these FAQs as new information becomes available.

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which, among other things, authorizes economic impact payments (also referred to as “stimulus payments” or “recovery rebate payments”) to eligible individuals. For details on these economic impact payments, please visit www.irs.gov/coronavirus

The IRS is aware that in some instances a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return (or 2018 tax return if no 2019 tax return has been filed) has been offset by the non-injured spouse’s past-due child support. The IRS is working with the Bureau of Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve this issue as quickly as possible. If you filed an injured spouse claim with your return and are impacted by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved. We apologize for any inconvenience this may have caused.

Due to system issues, the IRS and the Bureau of the Fiscal Service have delayed sending state child support programs stimulus funds until systems issues can be corrected to ensure funds are not inappropriately disbursed. This will result in a delay of some stimulus payments being offset towards child support arrears and being sent to families owed support. Continue to check in at this link for updates.

Will the federal stimulus payments be subject to the Treasury Offset Program (TOP)?

Yes. Federal law requires child support agencies to have procedures to collect past-due child support from tax refunds. In the federal stimulus bill, the CARES Act, Congress did not exempt the stimulus payments from federal offsets for child support arrears.

If I owe delinquent child support, will my stimulus payment be offset?

Maybe. Federal law and regulations determine when federal payments are intercepted and applied to child support arrears.

If TANF or IV-E foster care payments have been received for your child, the amount of past-due support on all of your child support cases must be at least $150 to have your stimulus payment offset.

IF TANF or IV-E foster care payments have not been received for your child, the amount of past-due support on all of your child support cases must be at least $500 to have your stimulus payment offset.

How much of my stimulus payment can be offset to satisfy my delinquent child support debt?

The stimulus payments can be offset through the Treasury Offset Program (TOP) only to collect delinquent child support obligations that have been referred by the state to TOP. The stimulus payment may be offset up to the amount of child support that is owed.

If I owe child support, will I be notified that my stimulus payment is going to be applied to my child support arrearage balance?

Yes. You were sent a notice when your case was initially submitted for federal offset. The federal government should send an offset notice to you when your stimulus payment has actually been intercepted. The notice will tell you that your stimulus payment has been applied to your child support debt and to contact the Child Support Division if you believe this was done in error.

What if I think my stimulus payment should not have been offset?

You may dispute the intercept of your stimulus payment if you do not believe that you owe past-due child support.

Remember, the referral is mandatory under federal law if you owe the minimum amount of arrears. The parent responsible for support may exercise his or her right to contest the intercept by personal contact, by telephone, or by correspondence:

Child Support Customer Service- You can make a verbal request for an administrative review by calling Child Support Customer Service at 1-877-882-4916.
Written Request- You can submit a written request for administrative review by mailing your request to:

MS Department of Human Services

Attention: Child Support Tax Offset

128 West Jefferson Street

Yazoo City, MS 39194

When will the stimulus payment be applied to my child support account and payment released to the parent who receives support?

If the parent who owes support files a joint tax return with his/her spouse, and there was no injured spouse claim filed with the 2019 tax return (or 2018 tax return if the 2019 tax return hasn’t yet been filed), it may take up to six (6) months for the payment to be applied and distributed to the parent who receives support. This allows the spouse of a parent responsible for support to appeal as an injured spouse as described below.

What if I am married to someone who owes child support, will my stimulus payment be applied to the child support arrears they may owe?

If you are receiving your stimulus payment jointly with your spouse and only the spouse owes the child support debt, you can file an injured spouse form with the IRS. Please visit the IRS website at https://www.irs.gov/forms-pubs/about-form-8379 to file your claim.

However, if you filed an injured spouse claim with your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), half of the total stimulus payment will be sent to each spouse and your spouse’s payment will be offset only for past-due child support. There is no need to file another injured spouse claim for the stimulus payment.

If I am the parent who receives support, and I’m currently receiving or have ever received TANF or Medicaid for my child, will I receive any money from a stimulus payment intercepted by the federal government from the parent who owes support on my case?

Maybe. Federal law dictates how monies received by a state child support agency under the Treasury Offset Program are distributed. In Mississippi, federal offsets are applied first to assigned arrears, or arrears owned to the state, and then to arrearages owed to the family. If there is money owed to the state in your case (TANF, Medicaid-Only, IV-E Foster-Care) and the threshold amount in Question #2 has been met, stimulus payments received by the child support program will be reduced up to the amount owed to the state. The remainder of money will be sent to you, up to the amount of unassigned arrears owed to you. The amount of the money you are entitled to receive will depend on a number of factors, including the amount of the stimulus payment intercepted, the amounts owed to you in your case, and the number of other child support cases in which the other parent owes child support arrears. You must also have a full-service case open with the Child Support Division to be entitled to receive any monies from an intercepted stimulus payment.

If I am the parent who receives support, and I’ve never received TANF or Medicaid for my child, will I receive any money from a stimulus payment intercepted by the federal government from the parent who owes support on my case?

Maybe. If the other parent owes you child support arrears and the total arrears on all of the other parent’s cases meets the threshold amounts indicated in Questions #2, then you should be entitled to receive monies intercepted from the other parent’s stimulus payment. The amount of the money you receive will depend on a number of factors, including the amount of the stimulus payment intercepted, the amounts owed to you in your case, and the number of other child support cases in which the other parent owes child support arrears. You must also have a full-service case open with the Child Support Division to be entitled to receive any monies from an intercepted federal stimulus payment.

What if I have additional questions about the stimulus payments? Am I eligible? What if I don’t file a tax return? How will I get the payment?

These questions, and others, can be answered by visiting the IRS website at www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

Other Resources

https://fiscal.treasury.gov/top/faqs-for-the-public-covid-19.html

https://www.acf.hhs.gov/css/resource/economic-impact-payments-under-the-coronavirus-aid-relief-and-economic-security-cares-act

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

*These FAQs are based on information available to MDHS at this time, and MDHS will update these FAQs as new information becomes available.