Forgiveness ProgramsDebt Consolidation

Will Student Loans Take My Tax Refund 2022? – Tax Refund Offset Reversal

A tax refund offset occurs when the federal government withholds part of your tax return to pay off a debt. The Treasury Offset Program offsets refunds for unpaid student loans, defaulted Federal Employee Retirement System (FERS) contributions, and more—and can use up to 15% of your federal income tax refund towards this purpose. This means you may receive a considerably smaller tax refund if any at all.

What is a tax refund offset?

A Treasury Offset Program (TOP)Offset happens when the federal government withholds part of your tax return to pay off a debt. The TOP offsets refunds for unpaid student loans, defaulted Federal Employee Retirement System (FERS) contributions, and more—and can use up to 15% of your federal income tax refund towards this purpose. This means you may receive a considerably smaller tax refund if any at all!

Will student loans take my tax refund in 2022?

Those most likely to have their refunds garnished are borrowers with federal student loans in default or those who owe taxes. However, even if you’ve been making payments on your debt, you could still have part of your refund taken if you’re behind on your costs by 90 days or more.

What leads to an offset?

A government office or creditor submits your information into the Treasury Offset Program database, which then determines if you owe money for federal student loans (or other debts), unpaid taxes, etc. The Office of Management and Budget reviews this program each year to ensure its efficacy.

Who’s at risk?

Borrowers who have federal student loans in default are the most likely candidates for a tax refund offset, as are those with delinquent taxes or other government debts. However, even if you’ve been making payments on your debt, you could still have part of your refund taken if you’re behind on your costs by 90 days or more.

What can I do?

If you have a tax refund offset, try to resolve the issue with the government office or creditor that submitted your information into the Treasury Offset Program database. If this doesn’t work, you can submit a request for a tax refund offset reversal. You must submit this request within 30 days of your offset, or you may be unable to undo it—meaning the government will continue taking part in your refund until they’ve recouped all money owed.

Other options

You can also contact a tax professional to appeal an offset if you don’t meet these criteria.

Wrapping up

tax refund offset reversal 2022

The Treasury Offset Program offsets refunds for unpaid student loans, defaulted Federal Employee Retirement System (FERS) contributions, and more—and can use up to 15% of your federal income tax refund towards this purpose. Although it’s not a simple process to regain your refund after an offset occurs, you may be able to get your money back if you follow the correct steps. So, if you’re expecting a tax refund and have any outstanding debts, be sure to stay informed about the Treasury Offset Program!

As mentioned earlier, there are several ways for the federal government to collect on unpaid debts. If you’re behind on payments or default on a student loan, you may find yourself subject to a tax refund offset. This occurs when the government withholds part of your tax return to repay what you owe.

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