Can a state takesomeone’s federal tax refund?

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Can a state takesomeone’s federal tax refund?

I have received a notice that a medical bill has gone to the MN revenue recapture program. Unless they receive payment in 10 days they will place it for collections. Does this mean I will loose both Federal and State tax returns or just state?

Asked on April 3, 2011 under Bankruptcy Law, Minnesota

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It depends. If you have received notice that your unpaid medical bill has gone to the state's revenue recapture program, it means you are one step closer to collections and one step closer to garnishment. If a collections agency gets it and you still don't pay, they or the medical provider if the medical provider takes it back, can sue you for reimbursement. Once a judgment is received then a garnishment could occur of your state and federal taxes. The question, however, is if your state also has the ability to capture your state tax refund at the revenue recapture level. According to your state' revenue recapture program, your individual income tax refunds (looks like state only), property tax refunds and lottery winnings of $600.00 or more (as well as other items) can be intercepted.


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