Understanding The Legal Process

Reducing A Tax Refund Offset By Filing As An Injured Spouse

by Eli Gregory

Some married tax filers are taken by surprise when some or all of their federal tax refund is not received due to earlier, unpaid debts. Individuals married to a spouse who owes back obligations for government debt or child support may receive their own portion of a federal tax refund by requesting relief as an injured spouse.

For tax purposes, the designation of injured spouse is not to be confused with that of innocent spouse. The circumstances of each are different, and there are different forms for the two situations. An injured spouse is a married person filing jointly, whose spouse has outstanding financial obligations subject to a federal tax refund offset.

Debt categories

Even if only one spouse incurred the financial obligations before the current marriage, both spouses are jointly subject to a refund offset on a current joint return. A tax refund may be withheld to pay the following types of outstanding debts:

  • Federal or state income taxes
  • Child support payments
  • Student loans

The initial offset of a refund is usually somewhat of a surprise. After that, tax filers know that another offset for the following year is possible if there is any remaining unpaid debt. Once aware of the potential for an offset, the spouse who did not create the obligation can file IRS Form 8379 to seek relief as an injured spouse.

Allocation of refund

If you were not responsible for creating the original debt, you are entitled to your share of the current refund. Form 8379 is used to allocate income and withholding shown on your current tax return to each spouse on a separate basis. The allocation between spouses on Form 8379 does not include a specific entry for your refund amount. The IRS ultimately determines the amount of the refund that is released to the injured spouse.

Form completion

Form 8379 may be filed by itself in response to a refund offset, or it can be filed with your yearly tax return. Each Form 8379 is applicable only to the single tax year for which it is intended.

The only signature required on Form 8379 is that of the injured spouse. If Form 8379 is filed by itself, attach copies of all Forms W-2 and Forms 1099 to support your reported allocation of income and withholding.

Including a request for injured spouse relief with your tax return may delay the processing of the return. Even with the delay, the use of Form 8379 frees up your own individual refund for use by your family. Contact a family law attorney for more assistance in seeking injured spouse relief.

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