The Minnesota Department of Revenue can take (“recapture”) tax refunds and use them to pay outside agencies or Federal tax debts through the Revenue Recapture process. All Minnesota income tax, political contribution and property tax refunds are eligible for “revenue recapture.”
A particular debt and its amount captured are referred to as a "revenue recapture claim" or a "claim". State Tax debts are paid first, and then revenue recapture "intercept" funds go to pay outside agencies who have filed claims. The department captures a debtor's refund and sends it to those filed claims.
Under the revenue recapture statute, captured refunds are paid in the following order:
- State taxes.
- Child support.
- Court-ordered criminal restitution.
- Health care.
- Claims by other agencies in Minnesota, such as student loans and other debts, with the oldest debt given first priority.
- Claims by government agencies from other states.
- IRS claims.
View the statutes (Minnesota Statutes, section 270A.03 and M.S. 270C.41).