How the Treasury Offset Program (TOP) Collects Money for State Agencies
The Treasury Offset Program (TOP) collects past-due (delinquent) debt for states including the District of Columbia, Puerto Rico and the U.S. territories through 5 programs. Some states also reciprocate by collecting some debt owed to the federal government. This page describes these state programs.
TOP collects the money by matching information about a debtor to federal payments (such as a federal tax refund) that the law says can be used to pay the debt. If there is a match, TOP holds back the money from the payment (offsets the payment) and sends the money to the appropriate agency.
Child-Support Services
How does it work?
States send information about delinquent child-support debt to the U.S. Department of Health and Human Services, Office of Child Support Enforcement (OCSE). OCSE sends that information to TOP.
How much money has TOP recovered?
In fiscal year 2023, TOP recovered more than $1.6 billion in child support obligations. That money went from the federal government to state agencies and then to the parents to whom the money was owed.
State Income Tax Program (SIT)
How does it work?
State tax-collecting departments (often called the Department of Revenue) send information about delinquent state income tax debt to TOP. By law, TOP may offset a federal tax refund to collect that money owed to the states.
How much money has TOP recovered?
In fiscal year 2023, TOP helped states by collecting $881.9 million in state income tax debt.
Supplemental Nutrition Assistance Program (SNAP)
How does it work?
States send information about delinquent SNAP debt to the U.S. Department of Agriculture, Food and Nutrition Service (FNS). FNS sends that information to TOP for collection.
How much money has TOP recovered?
In fiscal year 2023, TOP recovered $168.6 million in delinquent SNAP debt. That money went from the federal government to state agencies, which could then use the money to help others who need SNAP benefits.
Unemployment Insurance Program (UI)
How does it work?
Working with the U.S. Department of Labor, TOP may offset federal tax refund payments to collect delinquent state unemployment insurance debt in 2 situations:
- For fraud or failure to report earnings
- When unpaid UI employer tax debt has not been collected for at least one year after the debt was determined to be due
How much money has TOP recovered?
In fiscal year 2023, TOP recovered $405.2 million for the states that participate in the UIC program.
State Reciprocal Program (SRP)
How does it work?
TOP offsets non-tax federal payments for delinquent debt owed to state agencies, if the state has entered into an agreement with Fiscal Service for the collection of that type of debt. Debts collected in the other state programs listed on this webpage can also be collected through SRP, as can other types of debts. In return, states offset payments for delinquent debt owed to the federal government.
How much money has TOP recovered?
In fiscal year 2023, TOP recovered more than $73.3 million for states that participate in SRP.
For more information on TOP's state programs
State agencies interested in any of these 5 programs should reach out to their TOP liaison.