Administrative Procedure  AP 606: Refund Intercepts

In general, Massachusetts law allows the Massachusetts Department of Revenue (DOR) to apply taxpayers' overpayments to any outstanding undisputed tax liabilities they may have.  Additionally, for purposes of AP 606.1 – 606.7, an overpayment is subject to intercept regardless of whether the taxpayer has requested that DOR issue a refund or credit the overpayment to a subsequent tax period as an estimated payment. 

Joint filers may have their entire refund intercepted.  If the overpayment being applied to an undisputed liability resulted from the filing of a joint Massachusetts Income Tax return and only one joint filer is legally responsible for the debt, the non‑debtor spouse may request that DOR refund a portion of the overpayment by filing Form M-8379.  Form M-8379 (Nondebtor Spouse Claim and Allocation for Refund Due) may be filed only if the non‑debtor spouse would be due a refund based on separate filing status, and the income, withholding and estimated tax payments relate to the non‑debtor spouse.           

For further information, taxpayers should call the Contact Center at 617-887-MDOR or toll‑free within Massachusetts at 1-800-392-6089.

Please note that a $10 fee will be deducted from a taxpayer’s state tax refund to cover DOR’S costs of processing this state tax refund intercept.  The fee will be deducted from the refund prior to the intercept.

If DOR's Child Support Enforcement (CSE) Division certifies that a taxpayer owes past due child support, DOR will intercept the taxpayer's refund and apply that amount to the child support debt.

If the taxpayer wishes to contest the validity and/or the amount of the debt, he or she may obtain from and file with CSE a written Request for Review of State Tax Refund Intercept.  The taxpayer must submit documentation either that proves he or she does not owe past due child support or that proves he or she owes less past due child support than was intercepted.  This documentation often includes cancelled checks or court orders.  CSE reviews these documents and informs the taxpayer of the results.

Joint filers cannot avoid having their entire refund intercepted, up to the amount of past due child support.  Where a spouse who is liable for past due child support files jointly, however, the non-debtor spouse may receive his or her share of the state income tax refund by filing with CSE a Request for Review of State Tax Refund Intercept to determine what portion of the refund is attributable to the income of the non-debtor spouse.  To file a Request for Review of State Tax Refund Intercept, the non-debtor spouse must submit, along with a completed Request for Review form, a signed copy of the joint state income tax return, the W-2 forms for both spouses and any other information substantiating the share of the refund attributable to their income.  Filing a Form M-8379 is not sufficient to contest the intercept by CSE of a joint tax refund; the non-debtor spouse must file a Request for Review with CSE.  

CSE must receive the Request for Review of State Tax refund Intercept within 30 days of the date of mailing of the Notice of Intercept. Click to download the Request for Review of State Tax refund Intercept or call the CSE Division Customer Service Center at 1-800-332-2733 toll‑free (617-660-1234 for callers in the Boston area and 1-800-255-5587 for the hearing impaired). 

Please note that a $10 fee will be deducted from a taxpayer’s state tax refund to cover DOR’s costs of processing this state tax refund intercept.  The fee will be deducted from the refund prior to the intercept.

If the Internal Revenue Service (IRS) determines that a taxpayer is delinquent in the payment of federal income taxes, it may, as part of its general levy powers under section 6331 of the Internal Revenue Code, levy the taxpayer’s Massachusetts income tax refund.  DOR will intercept the refund and the IRS will apply it in whole or in part against the taxpayer’s federal income tax liability. 

If the taxpayer wishes to contest the validity and/or amount of the debt, the taxpayer should contact the Internal Revenue Service at 1-800-829-7650 or at the number on the Notice of State Income Tax Refund Transfer to United States Internal Revenue Service.  The Taxpayer should not contact DOR for information regarding a federal tax liability.

Please note that a $10 fee will be deducted from a taxpayer’s state tax refund to cover DOR’s costs of processing this state tax refund intercept.  The fee will be deducted from the refund prior to the intercept.

If the Massachusetts Department of Unemployment Assistance (DUA) certifies that a taxpayer has not repaid an overpayment of unemployment benefits, DOR will intercept the taxpayer's refund and remit the intercepted amount to DUA.  DUA will apply the refund against the amount of overpayment of benefits.

If the taxpayer wishes to contest the validity and/or the amount of the refund transferred to DUA, the taxpayer may apply for a G.L. c. 30A hearing before DUA by completing the Request for Hearing Form attached to the Notice of State Income Tax Refund Intercept Transfer (the Notice) and mailing it to the address listed on the Request for Hearing Form within 30 days from the date of mailing of the Notice.  If the taxpayer filed a joint Massachusetts income tax return and all or part of the refund that has been transferred to DUA is attributable to the income of the non-debtor spouse who has not received an overpayment, the spouse may apply for a G.L. c. 30A hearing before DUA by completing the Request for Hearing Form attached to the Notice and mailing it to the address listed below within 30 days from the date of mailing of the Notice.

For additional information, contact the Department of Unemployment Assistance at (877) 626-6800 or at the number listed on the Notice.  DOR should not be contacted for information about a refund transferred to DUA.

Please note that a $10 fee will be deducted from a taxpayer’s state tax refund to cover DOR’s costs of processing this state tax refund intercept. The fee will be deducted from the refund prior to the intercept.

If the Massachusetts Office of the State Comptroller (OSC) certifies that a taxpayer is delinquent in the payment of a liability to another state agency, to a Massachusetts city or town, an agency of a city or town, a housing authority, a state authority, or any federal agency as certified by a federal official to the comptroller pursuant to G.L. c. 7A, § 19, DOR will intercept the taxpayer's refund and remit the intercepted amount to the OSC.  The OSC will apply the refund against the delinquency.  DOR’s Notice of State Income Tax Refund Intercept Transfer (the “Notice”) will identify to the taxpayer the state agency, city or town, agency of a city or town, housing authority, state authority or federal agency where the delinquency exists.  If the taxpayer wishes to contest the validity and/or the amount of the debt, the taxpayer may apply for a G.L. c. 30A hearing before the entity to whom the intercept was remitted by applying in writing within 30 days from the date of mailing of the Notice.  If the taxpayer filed a joint Massachusetts income tax return and all or part of the refund that has been transferred is attributable to the income of the non-debtor spouse who has no delinquency, the spouse may apply for a G.L. c. 30A hearing before the entity where the delinquency exists by applying in writing within 30 days from the date of mailing of the Notice. The taxpayer should contact the entity where the delinquency exists directly using the address provided on the Notice. DOR should not be contacted for information about a refund transferred to a state agency, city or town, agency of a city or town, a housing authority, a state authority, or a federal agency. 

Please note that a fee of up to $25 will be deducted from a taxpayer’s state tax refund to cover DOR and OCS’s costs of processing this state tax refund intercept. The fee will be deducted from the refund prior to the intercept.

The Commissioner, along with the Office of the State Comptroller, is authorized to enter into a Reciprocal Offset Agreement with the Secretary of the Treasury and to oversee the Agreement as it pertains to state tax liabilities and state tax refunds.  Under the Agreement, the Commissioner will submit state tax liabilities to be offset against federal payments to vendors and contractors; federal agencies will submit federal nontax liabilities to be offset against tax refunds due to Commonwealth taxpayers.  Please note that there may be a fee associated with the offset.

The Commissioner is authorized to enter into Reciprocal Offset Agreements with other States that will allow the Commissioner to submit state tax liabilities to be offset against tax refunds of another State and for other States to submit their tax liabilities to be offset against tax refunds due to Commonwealth taxpayers.  The Commissioner will enter into a separate Agreement with each State that participates and there may be a fee associated with this offset.

If the debtor owes liabilities to several claimant agencies, priority of offset against any refund is as follows: (i) unpaid state tax liabilities; (ii) unpaid spousal or child support obligations certified by the IV-D agency as set forth in G.L. c. 119A; (iii) unpaid federal income tax liabilities; (iv) unreimbursed costs of health services to a child eligible for medical assistance under Title XIX of the Social Security Act; (v) unpaid Department of Unemployment Assistance liabilities; (vi) debts owed to the Massachusetts Higher Education Assistance Corporation; (vii) other debts as defined in G.L. c. 62D, § 1 in the order certified by the Comptroller; (viii) debts owed to the Department of Transitional Assistance; (ix) amounts owed to the Health Safety Net Office for obligations to the Health Safety Net Trust Fund for the cost of health care services paid from the fund under G.L. c. 118E, § 69; (x) any overdue debt certified by the Comptroller as due and owing to a city or town or to an agency of a city or town, to a housing authority, to a state authority as defined in G.L. c. 29, § 1 or any federal agency as certified by a federal official to the Comptroller pursuant to G.L. c. 7A, § 19; (xi) unpaid federal nontax liabilities to a federal agency under G.L. c. 62D, § 15; and (xii) unpaid tax liabilities of another state under G.L. c. 62D, § 16.

REFERENCES:
G.L. c. 7A, § 19
G.L. c.29, § 1
G.L. c. 30A
G.L. c. 62D, § 1
G.L. c. 118E, § 69
G.L. c. 119A
26 U.S.C. § 6331
Form M-8379, Nondebtor Spouse Claim and Allocation for Refund Due
Request for Review
Request for Hearing Form