Revenue Recapture Related Information

The Minnesota Department of Revenue will not apply refunds to your agency's Revenue Recapture claims when a debtor is in bankruptcy. You must:

• place a hold on any claims during bankruptcy proceeding (See Place a Claim on Hold)
• cancel any claims for debts that are discharged in bankruptcy (See Cancel a Claim)

When a taxpayer receives a Revenue Recapture Notice, they have the right to request a contested case hearing before an administrative law judge with the Minnesota Office of Administrative Hearings. (OAH) To do so, the taxpayer must send a written request to the claimant agency within 45 days of receiving the Revenue Recapture Notice. (See Minnesota Statute 270A.08.)

If a taxpayer contacts your agency and requests a contested claim hearing, determine the type of request and respond as shown:  

For further questions about the hearing process, contact the Office of Administrative Hearings:

Phone: 651-361-7900
Fax: 651-539-0310
Email: oah.webmaster@state.mn.us  

Exemption Qualifications for Medical Services Debts

Medical service debts are exempt from Revenue Recapture if the debtor's income was below Poverty (Medical) Income Guidelines at the time of the medical service. (See Minnesota Statute 270A.03 and Minnesota Rules 8165.0300.)

What Does an Agency Need to Determine Exemption Qualification?

Debtors must provide their federal tax return and all sources of income for the tax year they received the medical service to the claimant agency. Use the Poverty (Medical) Income Guidelines chart on this page to determine if the income is at or below poverty.

What qualifies as income?

For this purpose, income is the debtors' federal adjusted gross income plus any of the following income for both spouses: (Put the below bullets in two columns for spacing reasons)

• Non-taxable income
• Cash public assistance and relief
• Pension or annuity and all payments received under the Social Security Act
• Workers’ Compensation
• Disability income
• Lump-sum distributions
• Other income defined in Minnesota Statute 290.067, subdivision 2a.
   

Note: Child support does not count as income.

Poverty (Medical) Income Guidelines

Listed here are the Poverty (Medical) Income Guidelines. We base current year data on Federal Poverty Guidelines and adjust by state guidelines. They are linked directly within statute. (See M.S. 270A.03, subd 5.)

Note: If the debtor is married, include both spouses' incomes when applying these guidelines, unless they are legally separated.

The Minnesota Department of Revenue may take a joint refund (for married filers) for debts owed by one of the spouses. The other (nonliable) spouse may request a refund of their portion. If your agency receives a claim from a nonliable spouse, you must:

1. Determine how much of the original refund belongs to the nonliable spouse.
2. Contact the Revenue Recapture Program about returning the refund.
3. Update the claim in the Revenue Recapture system.

Nonliable spouses must request their portion of any refund within 18 months of our recapture notice for that refund. See Minnesota Rule 8165.0400.

When your agency files a Revenue Recapture claim for a debt, you must notify the debtor no later than five days after filing the claim by sending the notice to their last known address. If the notice is returned, attempt to locate a new address and resend the notice.

What information is required in the notice?

Your agency's Revenue Recapture notice must clearly state all of the following:

• The date, reason, and amount of the debt.
• That your agency intends to apply the debtor's state refunds to the debt until the debt is paid, cancelled, or the statute of limitations has expired.
• The debtor may dispute the recapture of their refund by requesting a contested claim hearing.
• Any other information required by law, depending on the type of debt or agency making the claim.

See Minnesota Statutes 270A.07 and Minnesota Rule 8165.0300.

Sample Revenue Recapture notices

General Notice 

Assistance Claims Notice 

Medical Notice 

Public Housing Notice 

You must contact us before you refund Revenue Recapture overpayments of $40 or more. We will tell you to refund the payment to the debtor or return it to us.

Before you contact us:

• Review your recapture claim in e-Services
• Cancel or update the balance

When you contact us, include the:

• Customer Names
• Social Security numbers
• Amount your agency received
• Amount of the overpayment
• Revenue Recapture 10-digit account number

You may not use Revenue Recapture to collect overpayments of public assistance in either of the below situations, unless there was a judicial or administrative finding of an intentional program violation: 

• The debtor is still a client of the assistance program and has not signed a waiver.
• The debtor is no longer a client of the assistance program but currently receives food support, transitional child care, or transitional medical care.

State or local laws typically set a time limit for collecting a debt ("statute of limitations"). Once the statute of limitations passes, you must cancel the recapture claim for that debt.

Claimant agencies cannot use outside debt collectors or other third parties to manage their Revenue Recapture claims. Only authorized employees of an agency are allowed to manage its claims. 

See Minnesota Statutes 270A.11.