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The Child Support Federal Tax Offset of

CARES Act Economic Impact Payments

Updated April 24, 2020
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136, enacted March 27,
2020) includes direct paymnts to individuals in 2020-referred to by the Internal Revenue Service (IRS)
as economic Impact pay lentsn ($1,200 per adult/$2,400 per couple filing a joint return; $500 for
dependent children). These payments are structured as tax credits automatically advanced to households
that meet certain criteria. Receiving a recovery rebate in 2020 will not affect a taxpayer's 2020 income
tax liability or tax refund, and taxpayers will generally not need to repay the rebate.
Section 2201 (d) of the CARES Act provides that these payments cannot be offset for past due debts to
federal agencies, past due state income tax debt, or unemployment compensation debt, but it does not
exempt those payments from offset for past-due child support for cases enforced by the Child Suppoil
Eafbrcement (CSE) progran. This Insight briefly summarizes how the CSE federal tax refund offset
mechanism generally operates and the guidance provided by the Office of Child Support Enfofrcement
(OCSE) and the Dcpartmcnt of the Trcasury for the offset of these direct payments.

Overview of the CSE Federal Tax Offset
All 50 states, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, and 60 tribal nations
operate CSE prograns pursuant to Title IV-D of die Social Secunty Act. The program is federally
administered by OCSE in the Adrmistration f (Children and Families (Departfent of Icalth and
Hluman Sor~jccs). The program is estimated to handle the majoriy of all child stpport cases; the
remaining cases are handled by private attorneys, collection agencies, or through mutual agreements
between parents. In FY2018, the program served 14,7 rniilion chi drne (about 20% of children in the
United States) and collected an estimated $34 billion i n child support, of which $7.7 bilhon was for
obligations that were past-due (arrears). The amount of arrears paid were about 7% of the $ 11 i billiol
in cumulative arrears owed to cases enforced by the program.
One of the enforcement mcthods available to the CSE program for collecting past-due support is
intercepting federal income tax refunds pursuant to Section 464 of the Social Security Act, and Section
6402(c) of die ntemal Re enue Code. For a refund to be subject to the ta-K offset, the child support
arrears owed by a child support obligor (which may be combined from multiple cases for the same
obligor) must be at least
                                                               Congressional Research Service

Prepared for Mhembes ad
Commitees of Congress

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