STATE TAX INTERCEPT

CS 651P State Tax Intercept – Procedures

12/16/85 Revised 05/15/18 Training Completed 11/06/14

45 CFR 303.102; 42 U.S.C. 657; U.C.A. 59-10-529; R527-200 and R527-475

 

 

Procedures

 

Two times per month (on the 14th and 28th), the Office of Recovery Services/ Child Support Services (ORS/CSS) creates a file of qualified debts on ORSIS cases to match against the State Finance records in order to submit debts for State tax refund intercept.  If a match is made against an non-custodial parent (NCP) who is due a State income tax refund, the tax refund will be intercepted by the State Tax Commission and electronically sent to CSS. 

 

 

Prior Notice

 

ORSIS automatically generates the “Annual Notice of Past-due Child Support” to the NCP’s last known residential address when the case meets automated enforcement criteria.  The “Annual Notice” notifies the NCP that his/her State tax refund may be intercepted.  The notice advises the NCP of the right to an administrative review or an adjudicative proceeding if he/she disagrees with the action or the amount of the offset.  

 

The notice also informs the NCP about the steps his/her present spouse may take to claim his/her share of the tax refund.

 

 

Distribution of State Tax Intercept Payments

 

Section 457 of the Social Security Act requires payments received from any source, other than Federal tax intercept, be credited to current support first.  Any amounts received that exceed current support must be applied to Non-IV-A arrears debts before IV-A arrears debts. 

 

 

Notice to Non-custodial Parent at Time of Intercept

 

ORSIS generates the “State Tax Notice of Amount Intercepted” letter to the NCP when the state tax refund intercept payment is posted.  This letter:

 

1.                   Notifies the NCP of the intercept payment amount.

 

2.                   Informs the NCP’s unobligated spouse regarding procedures for claiming his/her share of the refund. 

 

NOTE:  The letter will not generate if there is not a verified address for the NCP on ORSIS. 

 

 

Refunding Overpaid State Tax Payments to the Non-custodial Parent

 

If the State tax refund intercept payment exceeds the NCP’s debt balance, the payment will appear on your funds remaining report.  Before refunding the excess payment to the NCP and his/her present spouse, you must ensure the CSS erroneous payment team (Team 60) and the DWS overpayment team receives State tax intercept payments on their qualified debts.  A Senior Agent, Regional Quality Assurance Specialist (QA), or Manager must generate refund requests.

 

 

State Tax Intercept Fees

 

State Finance charges the NCP a $15.00 fee each time his/her state tax refund is intercepted.  This fee is withheld before the tax intercept payment is forwarded to CSS.  If the debt was referred for state tax intercept in error, request a refund from the ORS Account Disbursement (AD) Unit.  Include information justifying the need to refund the fee. 

 

The NCP must show that the debt did not meet the minimum state tax intercept criteria to receive reimbursement for the fee.  Do not refund the fee if the debt qualified for state tax intercept, but was paid prior to CSS receiving the state tax refund.