Alabama Stimulus Payment 2023 Status Update

In neither of its two rounds of Economic Impact (Stimulus) Payments did the Alabama Department of Revenue deduct amounts due to debtors. The U.S. Treasury approved and dispersed the Economic Impact (Stimulus) Payment.

Alabama cannot legally offset social security benefits; however, the IRS does offset a percentage for unpaid federal taxes. Call the Internal Revenue Service at 1-800-829-1040.

The Alabama Department of Revenue will continue to offset federal income tax refunds and state refunds even though you are meeting your payment arrangements. Alabama statute allows for the offset of an Income Tax refund until the account is paid in full even if you are on an approved.

Whom should I contact regarding the offset?

If you have questions about the Treasury Offset Program (TOP) or the notice you received from the U.S. Department of the Bureau of the Fiscal Service-Debt Management, contact the U.S. Treasury Offset Program (TOP) Call Center at 1-800-304-3107. Many state and federal agencies offset debts through TOP. The notice you received from the Department of the Bureau of the Fiscal Service-Debt Management will outline the name of the state agency (or agencies) that requested the offset of your federal income tax refund, along with contact information for those agencies. A letter is sent for each offset.

Whom should I contact regarding the offset of my stimulus payment(s) or Social Security Benefits?

The Alabama Department of Revenue did not offset the first or second Economic Impact (Stimulus) Payment for unpaid debts. The Economic Impact (Stimulus) Payment were approved and distributed by the U.S. Treasury. Alabama cannot legally offset social security benefits; however, the IRS does offset a percentage for unpaid federal taxes. Please contact the IRS at 1-800-829-1040.

The Alabama Department of Revenue does not charge a fee. However, the U.S. Department of the Bureau of the Fiscal Service-Debt Management charges a fee ($22.58) to offset federal tax refunds to pay tax debts. Bureau of Fiscal Service-Debt Management will deduct that fee before sending the funds to the Alabama Department of Revenue.

How can I avoid having my federal income tax refund intercepted for payment of my state tax debt?

Prior to submitting debts to the U.S. Department of the Bureau of the Fiscal Service-Debt Management for inclusion in TOP, the Alabama Department of Revenue is required to notify each debtor that it intends to refer the debt for federal offset. If you received the LOI (Letter of Intent) notice, you have 60 days to do one of the following:

Pay your debt in full. A payment coupon is attached to the bottom of each notice for your convenience, or you can go to https://myalabamataxes.alabama.gov/, click on the “Pay a bill I received” link, to make a payment.

Provide proof of payment. If you believe that all or part of this debt has already been paid, fax your documentation to 334-353-2282.

How soon will the federal refund that was offset show on my account?

It may take several weeks for the funds offset from your Federal tax refund to be applied to your State of Alabama debt. The Alabama Department of Revenue will send updated account information to TOP each Tuesday night.