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ADOR Continues Use of State Tax Refund to Pay Outstanding Debts

March 31, 2022

Phoenix, AZ—The Arizona Department of Revenue (ADOR) administers several offset programs that use an individual’s tax refund and applies it to outstanding tax liabilities and other state agency or municipality debts. ADOR offsets (holds back) as much of the refund needed to pay off overdue taxes owed by taxpayers and notifies them when this occurs.

ADOR may apply the tax refund to pay debts from:

  • IRS,
  • Child support,
  • Arizona courts, or
  • state and municipality fines/fees.


How the Process Works

  1. ADOR sends taxpayers an offset notice if any part of their refund is applied to non-tax debts. Taxpayers should contact the agency identified on the notice when the offset occurs if they wish to dispute the non-tax debt, or have questions about the offset.
  2. If the agency determines they are offsetting the refund, the amount will be taken from the ADOR tax refund and the remaining funds will be delivered through a paper check or direct deposit.


Taxpayers who receive a letter from ADOR, informing them that some or all of their refund was adjusted to pay outstanding liabilities should note that, by law, we must offset any refunds or overpayments to certain authorized agencies that have a claim against them.

Refund offsets will delay the issuance of the remaining refund (if any) after offset.


Payment Installment Plan

ADOR may offset any state or federal refunds due to you while you are on a payment plan.

Refund offsets are not a substitute for scheduled monthly payments, which remain due each month until your liability balance is paid in full.

Applying your refund to your unpaid balance may:

  • lower your balance due,
  • shorten the term of your payment installment agreement, 
  • lower the amount of your final payment, or
  • pay your balance in full.


Was your refund withheld and applied to an outstanding debt? Learn more about our refund offset programs and what to do next, here.



Thursday, March 31, 2022