Few things are more disheartening than anticipating what you're going to do with your tax refund, only to receive a notice from the IRS 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. This provision in the tax code is called "injured spouse relief."
- You may apply for Injured Spouse Relief for loss of tax refund due to your spouse's unpaid federal debt
- To be eligible you can't be held liable for the debt in question and also must contribute income to the tax return.
- Injured Spouse Relief is reserved only for refunds and cannot be applied to the joint tax liability.
- File IRS Form 8379, along with the necessary documents to apply for relief as an injured spouse.
Qualifying as an Injured Spouse
You can't be legally liable for the debt in question, either in whole or in part, to qualify as an injured spouse. In most cases, this means that the debt is premarital—your spouse incurred it before you were married—but they might have incurred student loans for their own benefit while you were married.
Common debts that can result in this type of offset include:
- Federally backed student loans
- Delinquent alimony obligations to a previous spouse
- 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
You’re not entitled to a share of the refund if you didn’t personally contribute to the income reported on the tax return. It doesn’t necessarily have to be earned income, however. Interest or profits from investments can meet this rule.
You must have paid in something toward the taxes due on the return as well, either because taxes were withheld from your paychecks or because you made estimated quarterly payments because you’re self-employed.
You can also meet this requirement if you qualify for a refundable tax credit, because credits act as payments toward 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 that's due on a jointly filed return.
How To File For Injured Spouse Relief
In order to claim relief as an injured spouse, you would need to fill out and submit IRS Form 8379. Here's how to do that.
Complete and Submit Form 8379
You can download the form from the IRS website. The instructions will walk you through the process 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.
You have two options for submitting Form 8379 to the IRS. You can attach it to your joint tax return if you receive a Notice of Offset from the U.S. Treasury Department before you file your tax return, alerting you that some or all of your potential refund will be seized when you file.
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 who made a claim for the money.
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 exceptions to these deadlines apply, so check with a tax professional if you think you’ve missed yours.
Do not include a copy of your filed tax return if you send in Form 8379 by itself. This will only complicate the matter and 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. This should tell you how and why the agency arrived at its decision.
Getting Your Refund Back
You’ll receive a portion of the refund equal to the portion of the taxes you personally paid in on that tax return if your request is approved. For example, you and your spouse might have paid in $6,000 in taxes, and $3,000 of that would be 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 also receive the same prorated share of any refundable tax credits you qualified for and claimed.
Claims in 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 2021.
These states take the position that debts incurred during a marriage are equally owned and 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. States' laws can vary 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.