How can one spouse be exempt from a tax refund being taken for back child support?
Tax refund intercept to pay support arrears is authorized and mandated by 42 U.S.C. § 664. The support obligation must be “past due,” so if the obligor is reasonably current on whatever order is out there¹ and there are no “assigned arrears,”² there might not be an intercept.If a child support obligor is married filing jointly, the spouse will be notified of the withholding of the tax refund and given notice of what steps they can take to claim their own share. See subdivision (a)(3)(C).³ If the spouse objects to the “intercept,” the IRS will make a ruling as to how much of the return is attributable to the obligor and how much to the spouse; the spouse’s share will be exempt and returned to them (though the process may take several months, a source of frustration to obligees and innocent spouses alike because refunds that are intercepted under this provision are put into a special account pending figuring all this out).The obligor should also have received notice of intent to withhold as part of this process. Id. subdivision (a)(3)(A). The obligor cannot object to the intercept; if the amount of claimed arrears is believed incorrect, this needs to be taken up with the court that issued the order.If the spouse does not claim the exemption, the IRS and the support agency will take the whole amount, with any amount in excess of the arrears to be refunded to the obligor eventually.Notes:¹ Per the IRS regulation at 26 C.F.R. § 301.6402-5(b), “delinquent” means three months past due.² “Assigned arrears” are reimbursement to the state for amounts paid to the child’s household by way of a cash TANF grant, or certain Medicaid expenses or foster care expenses. These arrears belong to the Government, not the custodial parent. There is some discussion of the concept in this answer.³ The statute provides as follows:(C) If the other person filing the joint return with the named individual owing the past-due support takes appropriate action to secure his or her proper share of a refund from which a withholding was made under paragraph (1) or (2), the Secretary of the Treasury shall pay such share to such other person. The Secretary of the Treasury shall deduct the amount of such payment from amounts subsequently payable to the State agency to which the amount originally withheld from such refund was paid.Emphasis added.