Refund Offset.
In plain English
A refund offset, run through the Treasury Offset Program, is when your federal tax refund is taken to cover certain debts you owe before any money reaches you. Common offset debts include past-due federal or state taxes, child support, defaulted federal student loans, and overpaid government benefits. You usually get a notice telling you how much was taken and which agency received it. The offset happens automatically once a debt is referred, so the first sign is often a smaller refund than expected.
01Why it matters
If you were counting on a refund and it shrinks or disappears, an offset is often why. Knowing which debt caused it tells you who to call and, if you are married, whether you can reclaim your share.
02The math, step by step
Say you expected a $2,000 refund but you owe $1,200 in past-due child support. The Treasury Offset Program keeps $1,200 to pay that debt and sends you the remaining $800, along with a notice explaining the offset and which agency got the money.
03What this is NOT
A refund offset is NOT a mistake or fraud. It is a legal collection of a debt you owe. If the offset paid your spouse's separate debt and not yours, you may be able to reclaim your share with an injured spouse allocation.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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