Do state refunds get offset for federal debts?

[brandonkaesberg]

My federal refund was offset and it wasn't enough to cover the debt. Will my state refund also be offset?

[MichaelDC]

It's possible. The Treasury Offset Program (TOP) is administered by the United States Department of Treasury’s Financial Management Service (FMS). It allows federal and state government agencies to collect outstanding debts owed to them by garnishing, or offsetting, your debt with your tax refund.

Most states are required to check their system for delinquent IRS, state or non-taxdebts (such as delinquent child support) before issuing a refund. If you owe the IRS, the state will apply that refund to your debt.

Conversely, state government agencies have the lowest priority when it comes to garnishing IRS refunds. Therefore, if you’re required to return unemployment compensation payments, or you have outstanding state income tax debts, your federal refund can be garnished to repay these obligations as well.