STATE TAX INTERCEPT

STATE TAX INTERCEPT

CS 650P State Tax Intercept – Criteria

12/85 Revised 09/03/24 Training Completed 09/17/24 Last Reviewed 08/04/26

42 U.S.C. 666; 45 CFR 303.102; Utah Code 59-10-529, 81-7-102; R527-475

The Office of Recovery Services/Child Support Services (ORS/CSS) submits cases to the Utah State Tax Commission to intercept a noncustodial parent’s (NCP’s) Utah State tax refund when the NCP’s payments are delinquent. CSS creates an initial State tax intercept referral file which includes all open cases that meet the criteria below. Semi-monthly, CSS creates a new file to update changes on qualified cases and to add any new cases that now meet the criteria.

Utah Code 81-7-102 provides that:

“(4) Each payment or installment of child support or alimony under any support order is, on and after the date the payment or installment is due:

(a) a judgment with the same attributes and effect of any judgment of a district court, except as provided in Subsection (5);

(b) entitled, as a judgment, to full faith and credit in this and in any other jurisdiction; and

Under Utah Code 59-10-529, in cases where there has been an overpayment of any tax, the amount of the overpayment may be credited against the amount of any judgment against the taxpayer obtained through due process of law by any entity of state government.

Criteria to Refer Cases for State Tax Intercept

1. There must be an active primary or secondary obligor parent on an open case, and the parent’s Social Security Number (SSN) must be known.

2. There must be an administrative, judicial, or tribal court order for support, for which the payments are delinquent.

a. The combined balance of IV-A and IV-E (children in care) debts assigned to the state on all of the NCP’s cases is at least $150.00.

b. The combined balance of Non-IV-A debts owing to the family and Non-IV-E debts assigned to the state on all of the NCP’s cases is at least $500.00.

c. When current support is being charged on the case, ORSIS compares the accruing debt balance to the current support amount due. The accruing debts are referred when the balance is greater than the current support amount due.

3. The State Tax Intercept field on ORSIS must be coded “Y” (Yes) for the debt to be considered. Code all arrears debts with a “Y” unless a court order states that the NCP’s state tax refund should not be intercepted.

4. The appropriate fields in ORSIS must be coded appropriately.

Debts Not Referred for Intercept

The debts/cases listed below are NOT referred for state tax refund intercept:

1. Current support debts.

2. Debts that are coded “N” (No) in the State Tax Intercept field.

3. None of the debts on any case where the noncustodial parent’s Bankruptcy Status field is coded as:

a. Filed; or,

b. Plan Confirmed.

4. The debts on a case where the AUTO ENFORCE indicator shows that good cause is an issue.

5. All debts associated with a pending obligation type.

6. Non-IV-D (NIVD) cases are not referred for state tax refund intercept.

Restrictive Support Order

Type “N” (No) in the appropriate field in ORSIS to delete a debt that has been referred or to prevent the debt from being referred for State tax refund intercept when the following criteria are met:

1. The court ordered an arrears payment schedule to liquidate the arrears; AND,

2. The NCP has paid the arrears payment as ordered each month since the order was entered; AND,

3. The order specifically says state tax refunds may NOT be intercepted.

An order entered by the responding state on an outgoing intergovernmental case which contains an arrears payment is not considered a restrictive support order, unless the responding state’s order is the controlling order. The interstate order is not considered an agreement between the NCP and CSS.

Consult with your manager to determine if it is appropriate to refer the case to the Attorney General’s Office (AGO) to remove the restriction in the order and allow for state tax refund intercept.