WASHINGTON — The coronavirus relief bill enacted Friday includes direct cash payments to help people through the crisis — but one red flag that can cost otherwise eligible Americans money is owing past due child support.
Owing back taxes or other debt to the government is not a problem, according to Sen. Chuck Grassley, R-Iowa, the chairman of the Finance Committee and a key author of the bill.
The legislation "turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments," Grassley wrote in a medium.com post.
"The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department," he continued.
In other words, Americans who are overdue on child support could see their cash payments reduced or eliminated.
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Under a 1996 law, the Treasury Department operates a program that allows it to collect overdue child support by cutting or withholding federal payments as an offset. State child support agencies share information with Treasury about people who are behind on payments, and the amounts.
The bill passed Congress this week and was signed into law on Friday by President Donald Trump. Treasury Secretary Steven Mnuchin has said the checks should start going out within three weeks.
The cash transfers are available to U.S. residents with a valid Social Security number who reported making less than $99,000 — or couples earning up to $198,000 — on a recent tax return. The one-time payments max out at $1,200 per person with an additional $500 per child.