Articles & Alerts
Still Waiting for Your Refund? Check New York’s Tax Refund Offset Programs
Are you still looking for your tax refund weeks or perhaps months after you’ve filed your tax return? If so, the delay may be a result of the taxing authority using those refunds to pay off other outstanding liabilities. New York, like many other states, participates in several offset programs that allow the government to apply funds owed to taxpayers, such as tax refunds, toward the taxpayers’ outstanding debts. These debts can include amounts owed to the New York State Department of Taxation and Finance, other state agencies, the IRS, or even tax liabilities from other states.
If a refund is offset to cover a debt, New York filers will receive a DTF-160 letter, Account Adjustment Notice, which details the amount offset, the agency receiving the funds, and the contact information for further inquiries. Taxpayers must resolve any remaining balances to avoid further collection actions. Note, certain debts, like child support arrears or unpaid state taxes, are often quickly prioritized for offset even if they’ve only recently become delinquent.
Types of Offset Programs
New York State administers several refund offset programs, including:
- Statewide Offset Program (SWOP)
Under SWOP, refunds may be applied to outstanding debts owed to certain New York agencies, which include but are not limited to:
- Department of Labor
- Department of Health
- Metro Transit Authority
- Office of Temporary and Disability Assistance
- Federal Refund Offset Program (FROP)
Under FROP, also known as the Treasury Offset Program, federal refunds may be used to pay New York State tax debts and vice versa. Taxpayers will receive a Notice DTF-450, Notice of Intent to Refer Your Debt for Offset, and have 60 days to resolve the debt or provide evidence that successfully disputes the right to request an offset. Processing fees associated with the offset will also be deducted from the refund.
- Multistate Refund Offset Program (MOP)
New York maintains reciprocal offset agreements with states such as California, Connecticut, Delaware, Maryland, and New Jersey. If a New York refund is sent to another state for debt repayment, contact that state’s tax agency for additional information.
Spousal Debt Offset
If filing jointly, a refund may be applied to a spouse’s debt unless the non-debtor spouse submits Form IT-280, Nonobligated Spouse Allocation, with their return. If this form is not submitted with the original return and the refund is applied to the spouse’s debt, it can be filed within 10 days of the DTF-160 notice mailing date to have the refund sent to the non-debtor spouse.
What to Do If Your Refund Is Offset
Taxpayers can dispute offsets by contacting the agency listed in the DTF-160 notice. For federal tax debts, contact the IRS directly. If your New York refund was applied to a tax debt in another state, you will need to contact that state’s tax department.
Understanding these offset programs can help taxpayers manage outstanding debts while ensuring anticipated tax refunds will be received. For more information on New York’s tax refund offset policy, please contact Alan Goldenberg, Principal and Leader of State and Local Tax and Tax Controversy groups, or your Anchin Relationship Partner.
