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Franchise Tax Board to Begin Reciprocal Refund Offset Program with New York State

Purpose of Bulletin

To inform staff that beginning October 29, 2013, we will exchange refund offsets with New York State. Personal Income Tax (PIT) refunds may be applied to a taxpayer’s debts owed to the other state

Background

The Delinquent Taxpayer Accountability Act, chaptered October 4, 2011, added California Revenue and Taxation Code Section 19377.5, granting us the authority to enter into reciprocal agreements with other states to offset refunds to pay PIT debts owed to the partner state.

These agreements enhance our ability to collect from taxpayers who reside out of state. The only state we are partnering with at this time is New York.

Priority of Debts

If there is more than one agency offset request, our priority is as follows:

  • Child support
  • Spousal support
  • Unemployment
  • FTB – registration collection unit/other state agencies
  • Cities or counties
  • Private and post secondary education
  • Internal Revenue Service
  • Multistate offset program

Post Offset Notice

Once a refund offset occurs, the offsetting state will issue a notice to the taxpayer with the offset date and amount. The notice will include contact information for the state to which the refund was offset. No fee is assessed for reciprocal state refund offsets.

Additional Information

Refunds that are offset to New York are processed through the Taxpayer Information system and can be identified on the Agency Liability Screen.

New York refunds that are offset to a taxpayer’s debt with us can be identified with the payment type “OFFSET PYMT”.

Taxpayer Inquiries

The Offset Program Team (OPT) telephone number will be on the New York Post Offset Notice.

If you are contacted by a taxpayer who received either a Multistate Refund Offset Notice or New York Post Offset Notice, direct them to:

  • OPT at 916.845.2867

Media contact should be directed to:

  • Public Affairs at 916.845.4800