The most common reason: offsets against other debts
The IRS withheld part of your refund to pay debts you owe to federal or state agencies. This is called offset, and it happens automatically when the government matches your tax return against records of unpaid child support, student loans in default, unemployment overpayment, or back taxes. You do not choose this — the IRS is required by law to do it.
The offset happens before your refund is issued. You will receive whatever is left after the government takes its share. If you owed $2,000 in back child support and your refund was $3,500, you would receive $1,500.
The IRS sends a notice called Notice 806 when an offset occurs. This notice arrives separately from your refund and explains which debt was offset and how much was taken. If you did not receive this notice, contact the IRS at 1-800-829-1040 to ask whether an offset was applied to your account.
Key Takeaways
- The IRS automatically offsets refunds against federal debts like unpaid child support, defaulted student loans, and back taxes owed.
- You will receive a separate Notice 806 explaining the offset amount and which debt it paid toward.
- State tax agencies can also offset refunds for state-level debts before sending your money.
- If you believe the offset was wrong, you can file a protest with the IRS Taxpayer Advocate Service within one year.
- Partial refunds can also result from math errors on your return, which the IRS corrects before sending your money.
State tax offsets work the same way
Your state tax agency can offset your state refund for state debts before sending it to you. Common reasons include unpaid state income tax, state unemployment overpayment, or state child support arrears. Some states also participate in the federal offset program, meaning a federal debt can reduce your state refund.
Each state has its own offset rules and its own notice process. If you received a smaller state refund than you expected, contact your state tax agency directly — the phone number is on your state tax return or on your state's tax website. Ask whether an offset was applied and request a copy of the offset notice.
The IRS corrected math errors on your return
If you made a calculation mistake on your tax return, the IRS catches it during processing and corrects it before sending your refund. The corrected amount is what you receive. This is not an offset — it is simply the IRS fixing an error so you get the refund you actually owed.
The IRS sends Notice 556 when it corrects errors on your return. This notice explains what was changed and why. If you disagree with the correction, you can respond to the notice within 30 days, though you will need documentation to support your position.
You claimed a dependent or credit you were not may have access to to
If you claimed a child tax credit, earned income tax credit, or other refundable credit that you did not meet the requirements for, the IRS will reduce your refund by that amount during processing. This often happens when income limits change year to year or when a dependent no longer meets the age or relationship requirements.
The IRS will send you a notice explaining which credit was reduced and by how much. Keep this notice — you may need it if you file an amended return or if you want to dispute the change.
Injured Spouse claim reduced your refund
If you filed jointly and your spouse owes a debt, you can file Form 8379, Injured Spouse Allocation, to protect your portion of the refund from being offset. However, if your spouse filed the claim and the IRS approved it, your refund will be smaller because only your portion is being sent to you. Your spouse's portion goes to pay their debt.
This is not a mistake — it is the intended result of an Injured Spouse claim. If you filed jointly and did not know your spouse had filed this form, contact them to understand what debt was involved.
How to track down what happened to your refund
Start by checking the IRS website using Where's My Refund? at irs.gov. Enter your Social Security number, filing status, and the exact refund amount from your return. The tool will show the status of your refund and, in some cases, will note if an offset was applied.
If Where's My Refund does not explain the reduction, pull your tax return and compare the refund amount you calculated to the amount you received. The difference is what was withheld. Then call the IRS at 1-800-829-1040 with your return in front of you and ask which offset or correction was applied.
For state refunds, log into your state tax agency's online account portal if one exists, or call the phone number on your state return. State agencies maintain records of offsets and can tell you immediately if one was applied.
What to do if you believe the offset was wrong
If you think the IRS offset your refund by mistake — for example, if you already paid the debt or if the debt belongs to someone else — you can file a protest. Contact the Taxpayer Advocate Service at 1-877-777-4778. This is a free IRS office that helps resolve disputes between taxpayers and the IRS.
You have one year from the date the offset was applied to file a protest. Bring documentation showing that the debt was paid, that you are not responsible for it, or that the amount offset was incorrect. The Taxpayer Advocate Service will investigate and can sometimes recover your money if an error is found.
For state offsets, contact your state tax agency's taxpayer advocate or dispute resolution office. The process and timeline vary by state, so ask what documents you need and how long the review will take.
Frequently Asked Questions
Can the IRS offset my refund for my spouse's debt?
Yes, if you filed jointly. Your spouse's federal debts can reduce the joint refund. You can file Form 8379 (Injured Spouse Allocation) to protect your portion, but you must file it with your original return or within three years of the filing deadline. If you file it after the refund is already offset, the IRS may not reverse the offset.
How long does it take to get my refund after an offset?
The offset happens during processing, before your refund is issued. You receive whatever remains after the offset is applied. The timeline is the same as a normal refund — typically 21 days from when the IRS accepts your return, though it can take longer if your return is selected for review.
Will I get a notice if my refund was offset?
Yes. The IRS sends Notice 806 when a federal offset occurs. This notice arrives separately and explains the debt and amount offset. If you do not receive it within 30 days of your refund, contact the IRS to request a copy.
Can I appeal an offset if I think it was applied to the wrong person?
Yes. Contact the Taxpayer Advocate Service at 1-877-777-4778 with proof that the debt belongs to someone else or that you already paid it. You have one year from the offset date to file an appeal. Bring your Social Security number, the offset notice, and any documentation supporting your claim.
What if my state and federal refunds were both reduced?
Both can be offset independently for different debts. Check your Notice 806 for the federal offset and contact your state tax agency for the state offset. The debts may be different — for example, federal offset for child support and state offset for unemployment overpayment.