Injured Spouce

[iannamorelli12]

Hi,

My husband and I decided to file jointly this year since we had another child and we'd get more back. So I filed electronically on Turbo Tax so now I need to fill out the Injured Spouce form and send it in since they'll take our taxes since I couldn't pay back my student loans and they went into default. I didn't work at all this year staying home with our kids. We live in Arizona, which is considered a community property state apparently. We just moved here in 2018 and were married in Ohio back in 2014, and I graduated college in 2008. Are they not going to release all our tax money now because of this rule? It seems silly really. Thank you for your help. 

[DavidD66]

Yes. It's called a Tax Offset.  If you owe money because of certain delinquent debts, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

If you owe federal or state income taxes your refund will be offset to pay those taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will take as much of your refund as is needed to pay off the debt, and send it to the agency authorized to collect the debt. Any portion of your refund remaining after an offset will be refunded to you.

If your husband files Form 8379, Injured Spouse Allocation, he can receive the refund associated with his income since it was you who defaulted on their student loans.