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Treasury Offset Program FAQs

  1. What is an offset?
  2. Why can the U.S. government offset my tax refund to collect income tax debts owed to a state?
  3. Can offset be avoided?
  4. Will FTB charge me any fees if my federal refund is offset to my state income tax debt?
  5. I paid FTB, but my federal refund was still offset. Why?
  6. I have a payment plan in effect with FTB. Will you still offset my federal refund?
  7. Will you notify Financial Management Service (FMS), a bureau of the U.S. Department of Treasury, of any changes to my balance for payments I make to FTB?
  8. How soon will the federal refund that was offset show on my account?
  9. I have been notified by FTB that my federal tax refund will be offset so I will not receive my full federal refund. I believe that I have paid off the debt and need to resolve this issue. Whom do I contact?
  10. FTB has served a garnishment for collection action, but my federal refund has already been offset and will pay the debt in full. What should I do?
  11. Can you send me another copy of the Intent to Offset Federal Payments letter that originally was sent to me by certified mail?
  12. Can I pay my debt to avoid offset?
  13. My spouse and I filed a joint tax return and our refund was offset for a debt that only my spouse owes. How can I get my portion of the refund back?
  14. Are Native Americans required to pay California income tax?

  1. What is an offset?

    An offset is when the federal tax refund you would have received is used to pay all or a portion of a state income tax debt you owe. If the full amount owed is not collected in one year, we may offset future federal payments to satisfy your tax debt.

  2. Why can the U.S. government offset my tax refund to collect income tax debts owed to a state?

    Section 6402(e) of the United States Tax Code allows federal tax refunds to be offset to collect delinquent state income tax obligations.

  3. Can offset be avoided?

    Yes. You must pay the balance of all tax liabilities listed in the notice, including ongoing interest, within the 60-day time frame provided in FTB 1102PC, Intent to Offset Federal Payments. If the debt is not resolved within 60 days, we will send our request to FMS to offset any federal income tax refund you may be entitled to receive.

  4. Will FTB charge me any fees if my federal refund is offset to my state income tax debt?

    Yes. We may charge a fee for federal offsets. Additionally, if you have an existing liability with us, we may charge you a collection cost recovery fee.

  5. I paid FTB, but my federal refund was still offset. Why?

    We requested to offset your federal refund before your payment posted to your account. Financial Management Service (FMS), a bureau of the U.S. Department of Treasury, cannot make any refunds after an offset has occurred. We will refund any overpayment to you once it posts to your account. If your federal debt was from a jointly filed return or assessment, we issue your overpayment in both names.

  6. I have a payment plan in effect with FTB. Will you still offset my federal refund?

    Yes. We will continue to pursue federal offset activity even though you are meeting your installment agreement terms. We also will offset any California state income tax refunds you are due until the amount is paid in full.

  7. Will you notify Financial Management Service (FMS), a bureau of the U.S. Department of Treasury, of any changes to my balance for payments I make to FTB?

    Yes. We send updated account information to FMS weekly.

  8. How soon will the federal refund that was offset show on my account?

    Allow a minimum of two weeks.

  9. I have been notified by FTB that my federal tax refund will be offset so I will not receive my full federal refund. I believe that I have paid off the debt and need to resolve this issue. Whom do I contact?

    Contact us at the address or phone number provided to you on FTB 1102PC, Intent to Offset Federal Payments. A representative will confirm your balance information. We will refund any overpayment to you once the payment posts to your account. If your federal refund was from a jointly filed return, we will issue your overpayment in both names.

  10. FTB has served a garnishment for collection action, but my federal refund has already been offset and will pay the debt in full. What should I do?

    Send a copy (keep the original) of the FMS letter informing you of the federal refund offset to the FTB employee who served the garnishment immediately. Your account will be reviewed and any necessary actions to adjust collection activity will be taken upon receipt of proof of the federal offset.

  11. Can you send me another copy of the Intent to Offset Federal Payments letter that originally was sent to me by certified mail?

    Yes. Call 916.845.2867 or write to us at:

    STATE OF CALIFORNIA
    OFFSET PROGRAM MS A141
    FRANCHISE TAX BOARD
    PO BOX 2966
    RANCHO CORDOVA CA 95741-2966

  12. Can I pay my debt to avoid offset?

    Yes. Use the payment coupon included in FTB 1102PC, Intent to Offset Federal Payments, to send in your check or money order within 60 days. You can also pay online.

  13. My spouse and I filed a joint tax return and our refund was offset for a debt that only my spouse owes. How can I get my portion of the refund back?

    Complete IRS Form 8379, Injured Spouse Allocation, and send it to the IRS to get your share of the refund. You can download the form at irs.gov, call the IRS at 800.829.3676, or visit a local IRS office.

  14. Are Native Americans required to pay California income tax?

    If you live in Indian country and meet certain requirements, all or part of your income may be exempt from California income tax. For requirement details, download FTB 674, Frequently Asked Questions About the Income Taxation of Native Americans.