- How to Dispute a Social Security Overpayment and Tax Refund Offset
- Basis for Determining Social Security Benefits
- If My Only Income Is From Social Security Disability Benefits Do I Have to File a Tax Return?
- Are Social Security Disability Benefits Taxable on Federal Taxes?
- Will They Garnish My Tax Return if I Owe Social Security?
- Can Back Taxes Be Taken Out of a Refund?
Some causes for overpayments of Social Security Administration benefits include administrative errors, undocumented changes to your financial circumstances and denials of medical disability claims. If the overpayment is not your fault, you may not have to repay any of it. However, if you are responsible for receiving more benefits than you should, you'll have to repay the balance. The SSA offers several options for repayment, but if you no longer receive benefits and don't respond to alternative options, the SSA can attach future income tax refunds to satisfy your debt.
If you're currently receiving Social Security benefits, any overpayment of benefits you receive is generally withheld from future payments. In this instance, the SSA does not typically capture your IRS refunds. Instead, the SSA withholds a portion of your monthly benefit until the amount of the overpayment is paid in full. If you receive Supplemental Social Security instead of regular SSA benefits, the SSA can still withhold all or a portion of your SSI to pay back the amount you owe.
If you no longer receive SSA or SSI benefits, the SSA will send a notice to the IRS that you have an outstanding balance with the Administration. The IRS assigns a debt code to your tax file and automatically sends your tax refund to the SSA. Your refund is applied first to any amount you owe the Administration. If your refund satisfies your balance in full, you'll receive the remainder of your tax refund, if any exists. If your refund does not satisfy your balance, the debt code will remain and your refund from each year will go toward the balance until it is paid in full.
Notice of Offset
Before the SSA can assign your balance to the IRS for collection, it must send you a notice to let you know it plans on collecting your refund. This letter, a Notice of Intent to Offset, includes a phone number you can use to contact the SSA if you have any questions. Depending on your circumstance, a different method of collection may be available. In addition, if you're married and file a joint return, your spouse may still be eligible to receive her portion of the tax refund if she is not liable for your SSA debt and has no SSA debt of her own. If your SSA balance is assigned for offset and your spouse is not liable, she should complete IRS Form 8379 and attach it to your tax return.
The SSA does have several alternative options to pay your balance. If you can't afford to have your entire benefit applied to the overpayment, or to have your tax refund offset, you may be eligible for a payment plan, settlement program or a 100 percent waiver of repayment. If the standard amount to be withheld causes a financial hardship to you, you may qualify for lower regular payments or a settlement. For more information on these programs, contact the SSA at 800-772-1213 or complete SSA Form 632 and take it to your nearest SSA office. This form is available on the SSA.gov website.