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Can New York state take my federal tax return for student loan repayment?

Middletown, NY |

I have a student loan from 1997 that has defaulted. The last payment on the loan was in 2009 when my state taxes were withheld and used as a payment on the loan. My 2012 federal taxes are now being withheld. I was married in 2012, we filed jointly, and now my husband must file an injured spouse form with the IRS. Our income falls below the poverty level. The amount of money being withheld is eleven percent of our total earning for the year. I do not understand how the state can keep my federal return.

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Attorney answers 3

Best Answer

Use the Office of the New York State Taxpayer Rights Advocate. The form to request their help is at


If I am correct, it is the IRS, and not New York State that has taken your federal refund to satisfy a federally guaranteed debt. And yes, they can take your refund to satisfy a defaulted federally guaranteed education loan.

Christopher Larson
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It happens all the time. Under these circumstances, I would recommend that you adjust your tax withholding - you are able to request withholding on a dollar basis rather than the standard # of exemptions. And start talking to the student loan collectors - this debt will never go away & is just racking up more & more interest & fees. Hope this perspective helps!

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