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Offset of Federal Funds or Payments

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The Minnesota Department of Revenue may offset (take) your federal income tax refunds or federal payments and apply them to your income tax debts or debt referred to us from referring agencies. See Minnesota Statute 16D.18.

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

The Treasury Department manages several programs that use offsets to collect overdue state and federal debts. For more information, visit the Treasury Offset Program website.

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How the Process Works [+]

For us to offset your federal refund or payment:

We send a Notice of Intent to Offset letter to your last known address, notifying you of our intent to file an offset claim with the U.S. Treasury Department.
We file a claim with the Treasury Department 60 days after we send you the Notice of Intent to Offset letter.
When the Treasury Department sends us all or part of your federal refund or payment, they will send you a Notice of Payment Offset letter. For more information, visit Offset Letters.

Qualifying Refunds or Payments [+]

We are only allowed to take certain refunds or payments for different debt types.

Debt type	We may take	We may not take
Individual Income Tax	Tax refunds Expense reimbursements Travel advances Vendor or contractor payments Grants	Social Security income Veterans' benefits Railroad Retirement benefits
Other	Expense reimbursements Travel advances Vendor or contractor payments Grants	Social Security income Veterans' benefits Railroad Retirement benefits Tax refunds

Debt type

We may take

We may not take

Individual Income Tax

Tax refunds
Expense reimbursements
Travel advances
Vendor or contractor payments
Grants

Social Security income
Veterans' benefits
Railroad Retirement benefits

Other

Expense reimbursements
Travel advances
Vendor or contractor payments
Grants

Social Security income
Veterans' benefits
Railroad Retirement benefits
Tax refunds

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Last Updated

November 17, 2025

Offset of Federal Funds or Payments

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