Question

Will the IRS take my state refund to pay back taxes I owe?

Answer

Maybe. Under the State Income Tax Levy Program, the IRS can levy (take) your state tax refund to offset back taxes, addressing any tax debt you might owe.

If this happens, the state will give you notice of the levy. The IRS will also give a notice, after the levy, offering you the opportunity to appeal the debt offset.

The IRS won’t issue a notice if you already received a notice of intent to levy that advised you of your right to a hearing.

Learn what to do if you can’t pay your taxes or if you get a notice about a tax return or account problem.

Related Topics

Related Resources

IRS Letter 2903 – Account Information or Change

The Taxpayer Advocate Service is contacting you about your IRS issue. Learn more about IRS letter 2903 with help from the tax experts at H&R Block.

IRS Notice CP177 – Intent to Seize Your Assets and Notice of Your Right to a Hearing

Learn more about notice CP177 and how to handle an IRS tax bill for your business with help from the tax experts at H&R Block.

IRS Notice CP166 – Insufficient Funds Available for Monthly Payment

There was not sufficient funds in your checking account to cover your monthly payment. Learn more about IRS notice CP166 from the tax experts at H&R Block.

Unpaid taxes

Get the facts from H&R Block about what happens when you have unpaid taxes, and all of the payment options you may have to fix the issue.