If you owe money to certain government agencies and institutions, we are authorized to withhold or reduce (offset) your Virginia tax refund to satisfy the debt, in accordance with the Virginia Debt Collection Act (Va. Code § 2.2-4800 et seq.) and the U.S. Treasury Offset Program (31 U.S.C. § 3716).

How does the refund offset process work? 

Certain government agencies can submit eligible delinquent debts for inclusion in state and federal offset programs.

Claims eligible for offset include eligible debt owed to:  

  • Virginia Tax
  • The Department of Social Services
  • Other Virginia state agencies and courts
  • Local Virginia governments – cities, towns, or counties 
  • The IRS
  • Some federal government agencies (non-tax debts)

Before we issue a refund, our systems check against these claims. If there is a pending claim, or multiple claims, we will withhold or reduce your refund by the amount of the debt owed. We will send you the details of the debt, including the agency making the claim, how much of your refund was applied or withheld, and a phone number to call in case you have questions. 

Individual and business tax refunds are subject to offset for debts from most agencies, however claims for federal non-tax debts can only be applied to individual income tax refunds.

If you have a remaining refund after your debts are paid, we will send you a check for the leftover amount. 

Have questions about an offset, or don’t think you owe the debt in question?  

  • If your refund was reduced to satisfy a Virginia Tax debt, and you have any questions or disagree with the bill, please contact Collections at 804.367.8045.
  • If the offset is for a debt owed to another agency, please contact the agency collecting the debt (which will be listed in the notice you receive). We do not have any information about debts with other agencies. If you have already paid your debt in full, or you don't owe the debt for other reasons, the agency collecting the debt is responsible for returning any part of your payment that should not have been reduced. 
  • If the offset was for a federal non-tax debt, and you need help contacting the agency, please call the TOP call center at 804.304.3107 (Toll Free) or 800.877.8339 (Communications Assistant for the hearing impaired).

Federal refund reduced because of a Virginia Tax debt? 

If you have delinquent debt with us, we can submit a claim to the U.S. Treasury Offset Program (TOP) to withhold or reduce any of your federal income tax refund by the amount of your tax debt. The claim may also be applied to eligible federal vendor payments for businesses with outstanding debt. 

If you receive a letter from us regarding a debt submitted to the TOP, and you think you’ve already paid the amount due or don’t owe it for other reasons, please contact us.