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Wylesong
Level 2

Tax Return garnished for Federal Student loans

I filed on April 3rd and called the number given to me to figure out if I had an offset. I learned I had one and was gonna have my return taken and to contact Us Dept of ED. I though they could not collect between March 13th and September 30th? I would not bother posting this question but I cannot contact them now until Monday and was wondering if anyone had answer or is dealing with this themselves?

12 Replies
ColeenD3
Expert Alumni

Tax Return garnished for Federal Student loans

This is what the IRS says. If it was taken wrongly, you would need to discuss it with them.

 

 

UPDATED: On March 25, 2020, ED announced that my federal tax refund would not be withheld to repay my defaulted federal student loan debt. My refund has already been taken. Will I get it back?

 

Yes, but only if your federal tax refund was in the process of being withheld—on or after March 13, 2020, and before Sept. 30, 2020—for the repayment of a defaulted federal student loan. Your federal tax refund will not be returned to you if the process to withhold your refund was completed before March 13, 2020.

If you have questions about whether your federal tax refund was withheld, call ED’s Default Resolution Group at 1-800-621-3115 (TTY for the deaf or hearing-impaired 1-877-825-9923).

Wylesong
Level 2

Tax Return garnished for Federal Student loans

My taxes were e-filed and accepted 4/23/2020. I am just confused as to why they are even attempting to take my small amount I am even getting back. I called and it certainly is for a federal student loan because it gave me the number for US dept of ED. 

 

Does that mean I now have to call and fight with the Dept of Education even though the act of trying to collect was suppose to be suspended early to mid March?

 

I only ask because it makes no sense why they even are making me do all this when I did not even file because I didn't get my W-2 until April because it got lost in the mail. I figured it would have just been okay and they would not have tried because it was suspended. 

 

I have also read that even though it says it is being offset for defaulted student loans that it would automatically get refunded without me needing to do anything.

I am just lost. Sorry and thanks for the reply.

KrisD15
Expert Alumni

Tax Return garnished for Federal Student loans

You can use the link below to see if your refund is being offset and if there is anything you can do abut it

 

Treasury link

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Wylesong
Level 2

Tax Return garnished for Federal Student loans

I do not sadly see a link there sadly letting me know if they are being taken but letting me know what do IF they are taken. I know on that "Where's my refund app" I got this message.

 

"Your tax refund has been approved for direct deposit"

"However, it may be partially or completely reduced to pay a past due obligation, such as child support, another federal agency debt, or state income tax. If so, the Bureau of the Fiscal Service (BFS), who issues IRS refunds, will send you a notice with the amount of the debt and contact information. The details of the debt are not provided to the IRS. This application will be updated with the refund amount remaining, if any, after the debt is deducted."

 

When I called the number given to me it does say I have a debt to the US Dept of Ed. I just am not sure if they are ACTUALLY gonna take it yet or what but I am about 90% sure the fact they decided to let me know about it that they are taking it. I just am not sure how if collections were suppose to be suspended until September 30th. I guess I am now suppose to call and play the waiting game for something that was not suppose to happen anyway.

 

Sorry not trying to offend anyone and I really do appreciate anything anyone can suggest. 😃 I am just confused and lost because I figured with the suspension and me filling so late by no fault of my own that I would not have to go through this.

Wylesong
Level 2

Tax Return garnished for Federal Student loans

I did call this number [phone number removed]. It did say I have an offset and from what I gathered it is for US Dept of Ed. It tells me I have 1 debt and to contact the US Dept of Ed so I am assuming it is for my Federal Student loan but like I said I thought the garnishments for them were suspended between March 13th to September 30th. I did not even get my W-2 until March 28th and filed on April 3rd. I was clear past March 13th so I am confused as to why they are even trying to take the money from me. I cannot call now until Monday sadly so I have to sit here wondering. 

MaryK1101
Expert Alumni

Tax Return garnished for Federal Student loans

According to the Department of Education, if the offset was in place before March 13th, there was no way to stop the offset even f you filed after the March 13th date.  

@Wylesong

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Wylesong
Level 2

Tax Return garnished for Federal Student loans

I am not sure what that means. I am sorry I am clueless. 

Just asking if I did not even file until April this year how could the offset be done before March 13th? I mean in that case couldn't they just file offsets for everyone that has student loans in default and then this whole situation would be pointless?

Also wouldn't that just count as a garnishment which also was suppose to be suspended?

 

Sorry once again I am just clueless and looking for answers. Thank you for any help though. 😃

MaryK1101
Expert Alumni

Tax Return garnished for Federal Student loans

There are legal procedures that must be done before an offset can be done- including notifying the taxpayer and allowing time for appeal- it is not done instantaneously so the dates are important.   

@Wylesong

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Wylesong
Level 2

Tax Return garnished for Federal Student loans

I can honestly say I have not recieved a letter this year. I know 2 years ago they took my refund as well. I just assumed offset is the same as garnishment of someones paycheck or tax return. I just figured when they said they were gonna suspend collections and garnishments that meant everything and because they garnished (took my taxes) the past 2 years I figured because of the new policy stating, "if filed after 3/13/2020 you would get your refund because of crisis", I would get mine as well. I am guessing if anyone that has had defaulted student loans no matter what does not get their refund no matter when they filed. This may just apply to only new people going into default. Other than that I am clueless because I did not file until after the date stated so I guess I never had a chance of getting mine.

Just asking then who does this apply to are help? I mean if they are suppose to suspend all collection and garnishment then then wouldn't that mean there would have to be a collection order or offset in place and that should be suspended?

Wylesong
Level 2

Tax Return garnished for Federal Student loans

I did tons of research and learns that Offset is just the term used for federal tax return garnishment meaning its the equivalent of having your pay check garnished but just named differently. I would think with the new order in place that state as of March 13th all Defaulted loans in collections will be temporarily suspend and even the US Dept of Ed agreed to stop collections and garnishments so that is why I am confused. Yes you are right that my offset( garnishment order) was in place prior to March 13th BUT the paper work and government stated that anyone that files taxes after March 13th shall receive their return because garnishments are temporarily suspend until September 30th. That to me would mean yes anyone that has and is currently having their paychecks garnished or Returns offset(garnished) would get their return because all acts of collection are suspend but only if you file after March 13th when the order was put into place. I filed my taxes on April 3 so I filed during the time when the US Dept of ED has suspend collection attempts to let people have their money to try and survive. Once this crisis is lifted they can go right back to collecting every last penny. Once again I could be wrong but its the government and IRS and its all topsy turvey to me. lol  

DavidS127
Expert Alumni

Tax Return garnished for Federal Student loans

As of 3/13/2020 the U.S. Department of Education has suspended collection of student loan debt.  According to the U.S. Department of Education website at this link and pasted here:

 

Questions About Defaulted Loans

 

UPDATED: On March 25, 2020, ED announced that my federal tax refund would not be withheld to repay my defaulted federal student loan debt. My refund has already been taken. Will I get it back?

 

Yes, but only if your federal tax refund was in the process of being withheld—on or after March 13, 2020, and before Sept. 30, 2020—for the repayment of a defaulted federal student loan.

 

Your federal tax refund will not be returned to you if the process to withhold your refund was completed before March 13, 2020.

 

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Wylesong
Level 2

Tax Return garnished for Federal Student loans

I got an update! I did get a noticed they were gonna take my money BUT I waited to see what happens and I got my refund anyway. I did not have to call anyone and got it automatically. I hope this helps anyone who is wondering about this issue and every stay healthy.

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