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Last Updated: 7/24/2017

Offsets of Federal Refunds or Payments (Federal Offsets)

We may offset (take) your income tax refunds or federal payments you are owed and use them to pay income tax debts or debts you owe other Minnesota agencies. (See Minnesota Statute 16D.18.)

The U.S. Treasury Department may also take your state tax refunds or payments and use them to pay debts you owe the federal government. See the federal law 26 U.S. Code 6402(e).

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 does it work?  

  • We file an “offset claim” asking the Treasury Department to send us any federal refunds or payments to apply to your past due debt.

  • We can only take certain refunds or payments that you are owed. The type of debt we are collecting affects which payments are eligible. For details, see below.

  • We will 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.

What refunds or payments can we take?

The type of debt affects which refunds or payments we may take, as shown in the table below. We cannot take federal payments if you are in bankruptcy

​Type of debt

​We may take

​We may not take

​Tax Debt

  • ​Tax Refunds

  • Expense Reimbursements

  • Travel Advances

  • Vendor or Contractor Payments

  • Grants

  • ​Social Security Income

  • Veterans Benefits

  • Railroad Retirement Benefits

​Other Debt

  • ​Expense Reimbursements

  • Travel Advances

  • Vendor or Contractor Payments

  • Grants

  • ​Social Security Income

  • Veterans Benefits

  • Railroad Retirement Benefits

  • Tax Refunds

Your right to review tax data about yourself

You have the right to see or get copies of data we have about you, unless it is confidential. For more information, see Your Right to Private Data about Yourself. For information about a debt referred to us by another agency, contact that agency.