Injured Spouse Relief
If your joint income tax refund was held back and applied toward your spouse’s past due debt, you may qualify as an Injured Spouse. The Internal Revenue Service (IRS) can seize income tax refunds when a taxpayer has past due federal and state taxes, debts owed to state unemployment agencies, unpaid child or spousal support, and any other delinquent federal debt. The IRS can seize the entire refund from a married couple’s joint tax return although only one spouse was liable for the debt. In this case, the affected spouse will suffer and be “injured” when the IRS seizes the refund.
Do you Qualify for an Injured Spouse Claim?
To qualify for an injured spouse claim you must meet all three conditions:
- You are not responsible for the past-due amount. For example, if the debt owed is one your spouse incurred from student loans prior to your marriage, failed child support payments, unpaid state income tax or any federal debt.
- You reported income on the joint tax return. If some or all of the income on the joint return whose refund was withheld was our income from a job, self-employment, or investment.
- You made and reported payments on the joint return. These payments include estimated tax payments, refundable tax credits, and federal income tax withheld from your wages.
How does the IRS determine the amount of refund for the injured spouse?
For the injured spouse, your share of refund consists of payments you have made plus a portion of refundable credits. If there was federal income tax withheld in your paycheck, child tax credits, and any earned income tax credit will be included in your share.
An injured spouse should file Form 8379 as soon as he or she recognizes the refund will be applied to a spouse’s previous obligation. You can file the form with your tax return or complete it later when you have received a letter telling you that your tax refund would be withheld to pay your spouse’s debt.
Allied Tax Advisory Group can assist affected couples, helping injured spouses receive a share of the refund.