Courts Tax Refund Offset

What is the Tax Refund Offset Program?

The Tax Refund Offset Program (TROP) is a coordinated effort of the U.S. Internal Revenue Service (IRS), the Michigan Department of Treasury, the Office of Child Support of the Michigan Family Independence Agency and local Friend of the Court offices to collect past due child, spousal and medical support.

The TROP is available to families who are owed child, spousal or medical support. TROP allows these families to get payment toward overdue support from a payer's state and federal income tax refunds.

How does the Tax Refund Offset Program work?

Income tax refunds can be taken by the Friend of the Court and applied to overdue support cases which meet the federal and state requirements. The TROP collects overdue child and spousal support if the spousal support is included in the same order as a child support obligation. For overdue spousal support, the former spouse and minor child or children must live together. Medical support is eligible for collection if a dollar amount is established by a court order.

Does my case meet the requirements for a Tax Refund Offset?

AFDC Cases:
If your children are receiving public assistance, a request for a federal and state tax refund offset is automatically entered by the Friend of the Court if $150 or more is owed in support.

Non-AFDC Cases:
Federal Offset Program: If your children are not receiving public assistance, you must have overdue support of $500 or more and a child under the age of 18. Or, the overdue support is owed for a child who is over age 18 and is disabled. The disabled child must have been disabled before age 18 and have a support order in effect, and proof of receiving Supplemental Security Income (SSI) or Social Security Disability benefits. Past due spousal support can be submitted if included in the same support order. Medical support is eligible if a dollar amount is established in a court order.

State Offset Program: The requirements are the same as the federal program, except you must have overdue support of $150 or more, and the child does not have to be under age 18.

How does my case qualify for the Tax Refund Offset Program?

Your case must be identified as a IV-D case by the Friend of the Court. All AFDC cases are automatically considered a IV-D case. If you are not receiving AFDC , you should check with the Friend of the Court to see if you have signed an application requesting IV-D service . If not, simply request an application from the Friend of the Court or the Department of Social Services support specialist. The IV-D program also provides assistance with: 1) support establishment, enforcement, review and modification; 2) paternity establishment; 3) absent parent location; and 4) tracking and monitoring of support payments.

How does the child support payer know if a request for a Tax Refund Offset has been made?

The federal and state child support agencies send the payer a pre-offset notice. This notice explains that the Friend of the Court requested a tax refund offset and provides the payer with information regarding appeal and/or joint tax return options.

When do I receive the Tax Refund Offset?

AFDC Cases:
Money from tax refunds on AFDC cases is turned over to the state of Michigan. The child support account is credited and AFDC costs are reimbursed.

Non-AFDC Cases:
Money from tax refund might not be received by the payee for up to 8 months from the date the offset was made by the Internal Revenue Service or the Michigan Department of Treasury. It is important to remember the following:
  • If the payer owes money to the state for any period of time the minor child(ren) received public assistance, this amount is retained by the state. Any money left over is paid to the payee.
  • No matter how much overdue support is owed, the most that can be collected through the TROP is the amount of the payer's income tax refunds.
  • Only the reported overdue support is sent to the Friend of the Court for payment to the payee. Any balance is paid to the payer by tax agency.
  • If the payer files a joint federal tax return, the Friend of the Court holds the refund 6 months before distributing it to the payee. This is required in case an income tax return adjustment is filed by the payer's current spouse.

Can the payer appeal the Tax Refund Offset?

Yes, the payer is notified prior to any action. The payer may appeal the request by using instructions provided in the pre-offset notice.

After the income tax refund is offset, an offset notice is sent to the payer by the tax agency. Information regarding the appeal procedure is in this notice.

For more information about the Tax Refund Offsett Program, contact the Friend of the Court office handling your case. 

Produced and distributed by:
State Court Administrative Office
P.O. Box 30048
Lansing, Michigan 48909
PSA 13 3/94