So my Husband owes back taxes from before we met that he’s been paying off on a payment plan. This I knew. It’s fine. We decided to take advantage of our governments ‘blessing’ our marriage and file jointly. First year was fine. This year, I filed, electronically, everything accepted, just perfectly. Got a bill from NYS for our joint return that was astronomically when in actuality, this years numbers indicated a small return. So…I am told I can file a aggrieved spouse letter, etc. In the interim, I’m waiting for the Federal Return which usually comes pretty quickly. That’s a nice piece of change which will tide us over while I’m waiting for the first paycheck of my new job.
When we called NYS today, there was a lovely prerecorded message indicating that there’s a new rule that allows NY state to levy all of your federal return in payment against the state returns. Without your knowledge, without your consent.
De effing lightful.
So now, new job, no cash flow
Oh and the refund wouldn’t even come close to the alleged amount they are claiming.
Why? Because dear hubby did not live in NYS for the years that they claimed he didn’t pay…but never bothered to change his residence to Connecticut.
It’s not the paying of the taxes that stinks…cause it does. My county is #3 of all the country of highest taxes…the option is to move, but my career is based out of Manhattan and I couldn’t move any farther away than I live now and still commute. It’s just the policy of there being no protection of one’s cash. Pretty much your accounts can be frozen and you’re not even notified. We haven’t gotten to that point, because he’s on a payment plan but apparently they’d like to get their dollars a little quicker, so any money is fair game.
It irks me in so many ways…NY states taxes us on the ‘income’ from our Federal Return…but WAIT…didn’t I pay NY State taxes on that when I was paid and via my state return? Yes, I did, but NY state gets to double dip. Do I get to offset my federal income taxes paid I I’m not due a refund, but have to pay Federal? Nope. So in theory, NY state legislation allows for them to take my already taxed income as income, but I don’t get to relieve my tax burden by paying the Federal Government. Interesting.
I know someone in some political party, which shall remain nameless (republican) voted this juicy piece of legislature in last year. Still… GRRRRRRRRRRRRRRRRRR
I got tripped on by the speed bumps that were repeated reference to “return” v. refund.
If NY wasn’t doing what every other state does (ask the IRS to cough up your refund when you owe dough), that’s interesting. I’ll presume it’s with regard to nonresident income tax returns. It’s a reciprocal thing, just like if one state suspends your driver’s license, you cannot get one in another state (if/when they know of it).
You mention hubby having a “payment plan” for taxes owed … but then at the end you say he merely forgot to mention he lived in CT. Presumably he wouldn’t agree to pay NYS taxes when he didn’t owe them (which leads me to believe perhaps CT would bash him harder if they knew they should be going after income tax money). Does he work in NY and should’ve been filing a nonresident income tax return (and asking CT for credit for any income tax paid to NY)? This may be a more complicated wicket than hubby let on. Maybe hubby should talk with a tax specialist.
Anyhoo … best practice: if your refunds are attributable to wage income, address your W-4 exemptions (state and federal) and do not give the government(s) an interest-free loan.
Of course that’s because the state doesn’t need to what with all the other taxes you and the rest of the state population are paying. If all of those taxes were lower, you can be mighty sure that there would be an income tax too.
In short: the state’s money doesn’t magically appear.
I’m confused at the OP’s surprise. Why wouldn’t the state government be allowed to attach an asset to satisfy a legal debt to the state?
OP mentioned that her husband has been paying it down in a payment plan agreement, and, up until now, that has been satisfactory and his federal return has not been affected. Unless he’s failing to live up to the payment plan, why should they be able to also go after something else, and, if they could, why did they wait until now?
I can’t imaging working out a payment plan to deal with a debt and then suddenly having assets seized in addition to the plan.
Of course, that’s if he’s following the plan. The fact that it’s just become a problem this year suggests he hasn’t.
Tax collectors–and especially state tax collectors (in many states)–are some of the most idiotic, stubborn, power-mad, and evil people in existence.
Basically, if they can do anything to mess up your life, they will do it. They want whatever money they claim is theirs, and they will take it by any means they can, regardless of the consequences to you.
Sometimes the generic idiocy of bureaucracy mitigates the evil, and sometimes it exacerbates it.
I can easily imagine that the “fine print” in the agreement mentions that if the debtor gains a new assedt, that asset may be subject to separate action not covered by the plan.
My husband was paying it off, about 200 bucks a month, with about another 18 months to go…but the new law allows them to attach whatever is left from any return and apply to the outstanding, I’m fine with the idea of NY state doing that, but it was quite surprising to have it happen this way. Got through to the ?IRS last night and the good news since the debt was incurred before we married, I file an aggrieved/injured spouse claim and they return my portion of the income…but they haven’t sent out the official notice, and then there eight to ten weeks after it’s sent that they recalculate the amount and finally mail me a check. So …
On the bright side:
So far neither the IRS nor the State tax authorities can touch Social Security payments.
CA grabbed my checking (sole account) over income tax - it was 100% SS Disability payments.
They had to give it back.
And then (I still don’t understand this) they knew that I now lived in a different county than the one in which they had filed a personal lien. If they didn’t file a new lien in the new county, the old one could be discharged through Chap 7 bankruptcy (which it was, I am happy to report).
Perhaps it is not new; I’ve never been in the situation before. But I do know the recording advising that this a practice is indeed new; I’ve had to call the help lines several times recently and that recording was not being played. I am curious now, so I’d like to know when this came about
Call the IRS. There used to be a provision where one spouse can claim half the tax refund be returned if it was levied for the dept of another. If this is still the case, the IRS will levy NY’s bank account and you’ll have some satisfaction in the matter.