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Last Updated: 11/8/2013

Offsets of Federal Refunds or Payments (Federal Offsets)

Under federal law, we can “offset” (take) your income tax refunds or federal payments you’re owed and use them to reduce or pay debts you owe the Minnesota Department of Revenue. We can do this for overdue tax (plus penalties and interest), and for debts you owe other Minnesota agencies.

The U.S. Treasury Department can also take your state tax refunds or payments and use them to pay debts you owe the federal government.

Note: The Treasury Department manages several programs that use offsets to collect overdue state and federal debts. For more information, see Treasury Offset Program (on that agency’s website).

How it works

  • If you owe an overdue state debt, we ask the Treasury Department to send us any federal refunds or payments that we can legally use to pay that debt. We do this by filing an “offset claim.”
  • We can only take certain refunds or payments that you’re owed. The ones we’re allowed to take are “eligible for offset.” The type of debt we’re collecting affects which payments are eligible and when we can file an offset claim. For details, see:
  • We’ll notify you 60 days before we file an offset claim by sending a letter to your last known address. The Treasury Department will notify you when they send us all or part of your federal refund or payment. For details, see Offset Letters.