Will the IRS or state take your tax refund due to delinquent student loans?

Yes the state can take back your refund under the circumstance of your student loans defaulting particularly because it will be one source of repaying your loans. The IRS doesn't take your refund, but instead forwards it to the department in a way to satisfy the debt you owe. For instance, the Department of Education has the ability to transfer your federal/state tax refund to the Department of Treasury in order to pay off as much of your debt as possible. They do this because they'd rather settle debt quickly rather than give out tax refunds to people who normally default on their loans.

Recommended content for you

Related Tax Questions

Can you find out if your tax refund will be taken for a past debt i.e student loans before you file?
Usually, if you already know that you have overdue taxes, child support owed, and/or student loan debt that you have accrued over time, then... ... Read More
Can a lender take your tax refund until the debt you owe is settled?
Being in debt creates a lot of problems. Everyday your debt gets a little higher due to interest owed. But in the world of taxes a lender...... Read More
If a third party makes payments on a student loan or donates money to help someone pay off his or he
It really depends on the income of the person donating his/her money to pay off the student loan debt. Since the money given isn't...... Read More
Can the IRS take your workmans comp payout to pay back taxes?
The IRS has many powers, including the power to seize your tax return for various reasons. One power the IRS does...... Read More
If you filed chapter 13 bankruptcy will the trustee take your tax refund?
Yes, your trustee will require you to turn over your refund as a source of payment for your creditors. The reason for this is because the trustee will...... Read More
Can credit card creditors take your income tax refund?
There are only three conditions in which your tax refund is in danger of being seized. One is if you default on your...... Read More
Can you pay a state tax lien online?
A tax lien is when you are delinquent in payment on various things such as back taxes, creditor's debt, or others, and the government...... Read More
If your car gets repossessed and you choose not to pay for it can they take your tax return?
For most states, no your tax refund cannot be taken away and used as payment of your repossessed car if you decide not to pay for it; however, the lender can...... Read More
How long does it take to get your federal tax return back in the mail?
Unfortunately, it does take quite awhile for you to receive your federal tax returns back in the mail. Ideally, it roughly takes about...... Read More
If your wages are garnished can they also take your tax refund?
When your wages are garnished that means you had acquired a debt from a lender (can be mortgage debt, credit card debt, etc.) and...... Read More
Can the bank pay an IRS Levy without sufficient funds in your bank account?
An IRS levy is any tax imposed on an individual by the IRS. It can be placed directly on someone's bank account and it goes through the...... Read More
Can the IRS garnish your wages? If so, how?
The IRS has many powers and responsibilities, but there's one power that sticks out that not a whole lot of people know. The IRS does...... Read More

Comments