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1 1 (April 24, 2020)

handle is hein.crs/govdacz0001 and id is 1 raw text is: i% 'N\jc 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 https://crsreports.congress.gov IN11322 CRS INSIGHT Prepared for Mhembes ad Commitees of Congress

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