If I owe child support can they take the child tax credit on my new child?

Yes. The IRS and State Governments have the ability to offset a refund to pay for certain past due debts.  You generally will receive a letter stating what the offset was for.   

The IRS provides a toll-free number,  (800) 304-3107, to call for information about tax offsets.

Refund Offset  

I.R.C. § 6402(a) authorizes the IRS to credit an overpayment, including any interest generated on the overpayment, against certain liabilities of a taxpayer before refunding any portion of the overpayment. 

The debts that may be offset under section 6402 include: 

■ any unpaid federal tax liability;  

■ any unpaid federal non-tax debt;  

■ past-due child support;  

■ past-due, legally enforceable state income tax obligations; and  

■ unemployment compensation debts.  

The Treasury’s Bureau of the Fiscal Service (BFS) manages debt, other than federal tax debt, through the Treasury Offset Program (TOP). The IRS issues a notice of offset for federal tax debts. BFS issues a notice of offset for TOP debts.  

A tax overpayment must offset all outstanding federal tax debt before it offsets any other debt. When the overpayment is applied to a federal tax debt, it is applied in the following order (applied within each category in the order accrued):  

1. Federal tax under the primary taxpayer’s TIN  

2. Additional taxes reported on Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and other Tax-Favored Accounts  

3. Civil penalties  

4. Federal tax under a secondary TIN  

5. Business master file liabilities  

6. Non-master file liabilities  

After all outstanding tax debt is satisfied, any remaining overpayment is applied to TOP debts  

in the following order:  

1. Past-due child support  

2. Debt owed to other federal agencies (e.g., student loan, overpayment of social security benefits)  

3. Past-due, legally enforceable state income tax obligations  

4. Unemployment compensation (erroneous payment due to fraud or failure to report earnings, contributions due to the unemployment fund, and any penalties and interest assessed on such debt)