IRS Injured Spouse Relief: How to Get Your Intercepted Tax Refund Back
Some Creditors Can and Will Seize Your Tax Refunds
Little can be more disheartening than waiting eagerly for your tax refund only to receive a notice from the IRS instead saying that you won’t be receiving it. Certain creditors can legally intercept federal tax refunds, but the IRS provides a way for you to get your share of the money back if it happened because you filed a joint married return with your spouse and the debt in question isn't yours. It’s called injured spouse relief.
Who Can Intercept a Tax Refund
The average creditor can’t seize a tax refund, but government agencies can do so. Common debts that can result in this type of offset include:
- Federally-backed student loans
- Past due alimony
- Past due child support for a child from another relationship
- Federal and state tax debts due on separately filed returns from previous years or from returns filed before the marriage
- Unemployment compensation debts owed to a state
Qualifying As an Injured Spouse
You obviously can't be legally liable for the debt in question, either in whole or in part. In most cases, this means the debt is premarital—your spouse incurred it before you got married. But they might have incurred student loans for their own benefit while you were married.
You must have reported income on the joint tax return in question, although it doesn’t necessarily have to be earned income. Interest or profits from investments can meet this rule.
You’re not entitled to a share of the refund if you didn’t contribute to the earnings reported on that tax return.
You must have paid in something toward the taxes due on the return as well. This can be withholding from your paychecks or estimated quarterly payments you made because you’re self-employed.
You can also meet this requirement if you qualify for a refundable tax credit which acts like a payment toward the taxes owed.
What an Injured Spouse Claim Can't Do
Injured spouse relief is reserved for taxpayers who have lost some or all of their tax refunds due to their spouse's solely-owed debt. It only addresses refunds. It can't relieve you from liability for paying a tax debt due on a jointly-filed return.
Completing Form 8379
File IRS Form 8379 if you think you’re entitled to your share of a refund that was intercepted to pay your spouse’s debt. You can download the form from the IRS website and the instructions will walk you through completing it step by step.
Be sure to attach copies of all 1099 forms and your W-2s—your own and your spouse’s. It’s not necessary for your spouse to sign the form, but make sure you include their Social Security number.
You must file a separate Form 8379 each year if the debt in question is so significant that you expect your refunds will be subject to offset for years to come.
Submitting Form 8379
You have two options for submitting Form 8379 to the IRS. You can attach it to your joint tax return if you’ve already received a Notice of Offset from the U.S. Treasury Department before you file, giving you a heads-up that some or all of your potential refund is going to be seized when you file.
Write “Injured Spouse” at the top of your tax return in the left corner of the first page. You can also include Form 8379 if you e-file your return.
Filing Form 8379 with your tax return is usually your best option because the IRS will process it before offsetting any funds for the debt in question—in other words, before sending the refund to the entity that made a claim for the money.
Your other option is to submit Form 8379 by itself if you’ve already filed your return. You have up to three years after the original joint tax return was due to do so, including any extensions you applied for in that tax year, or two years from the date you last paid any taxes due on the return, whichever is later. Send it to the IRS address where you submitted your original tax return if you mail in a paper copy.
Some isolated exceptions apply so check with a tax professional if you think you’ve missed the deadline.
Do not include a copy of your filed tax return if you send in Form 8379 by itself. This will only slow things down.
Waiting for an IRS Decision
The IRS will review your submission and the attached documents to determine whether you meet all the rules for injured spouse relief. Unfortunately, this won’t happen quickly. The IRS indicates that it processes Form 8379 requests and responds within about 14 weeks, although you might hear back within 11 weeks or so if you file electronically.
You can request a copy of your Injured Spouse Claim Worksheet from the IRS if your request is denied.
Getting That Refund Back
If your request is approved, you’ll receive a portion of the refund equal to the portion of the taxes you paid in personally on that tax return. For example, you and your spouse paid in $6,000 in taxes, and $3,000 of that is directly attributable to withholding from your paychecks or your estimated payments. You'll receive 50% of the refund, regardless of the existing debt.
You should receive the same prorated share of any refundable tax credits you qualified for and claimed.
A Note About Community Property States
You might be subject to special rules if you live in one of the nine community property states: Arizona, California, New Mexico, Texas, Louisiana, Washington, Idaho, Nevada, and Wisconsin as of 2020. These states take the position that debts incurred during a marriage are equally owed by both spouses, and assets acquired during the marriage are equally owned by both spouses as well.
This can obviously complicate things if the debt that resulted in the seizure of your refund isn't premarital. Speak with a tax professional to find out where you stand if you live in one of these jurisdictions. Each state’s laws can differ slightly and the IRS defers to state law in this situation.
Injured Spouse vs. Innocent Spouse Relief
Injured spouse relief isn’t the same as innocent spouse relief, although both relate to jointly-filed married tax returns. You’re an “injured” spouse if someone takes money that’s rightfully yours. You’re “innocent” when your spouse commits some wrongdoing on a joint return but you had no knowledge of what they were doing.
You're considered an injured spouse when your share of a joint tax refund is used to offset a debt that's solely owed by your spouse.
Do not take the steps explained here if you're asking for innocent spouse relief. It requires a different form and a different process.