Seizing the Safety Net: Collecting Criminal Justice Debt with Tax Refund Offsets

By: April Kuehnhoff & Marina Levy

January 30, 2025 — Report

This report looks at one little-known method of collecting criminal justice debt—seizing income tax refunds—and highlights the financial harms for justice-involved individuals and their families when the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) are seized as part of that tax refund.

This report:
  • Defines criminal justice debt and discusses different methods used to collect it;
  • Examines the use of tax refund seizure as a method to collect criminal justice debts, using federal and Kansas data;
  • Considers the role that tax refunds play in distributing cash benefits to low-income families and children and the impact of seizing these payments; and
  • Provides data about federal criminal justice debt and Kansas criminal justice debt.
Summary of Recommendations:

Federal and state governments should:

  • Amend their laws to prevent offset of EITC and CTC.
    • Until such a change is made, they should provide detailed annual reporting about the amounts offset generally and from households that received the EITC and/or CTC specifically.
  • Improve reporting about the amount of criminal justice debt outstanding and the methods of collection that they use.
View & Download Full Report (PDF)
Interactive Table on Kansas Municipal Court Debt Data
Figures:
Figure 1: Ending Balance for Federal Criminal Justice Debt Owed to the U.S. (FY 1992-2023)
Figure 2: New Balance as a Percentage of Federal Criminal Justice Debt Owed to the U.S. (FY 2009-2023)
Figure 3: Ending Balance for Federal Criminal Justice Debt Owed to Third Parties (FY 1992-2023)
Figure 4: Decline in New Balance as a Percentage of Criminal Justice Debt Owed to Third Parties (FY 2009-2023)
Figure 5: Net Amount Collected for DOJ via TOP Tax Refund Offsets (FY 2001-2022)
Figure 6: How Method of Calculation Can Increase Collection Fees
Figure 7: EITC Amount by Number of Qualifying Children, Marital Status, and Income, 2023
Figure 8: Federal Child Tax Credit Structure in 2024 (Two-Child, Two-Parent Family)
Figure 9: Federal Tax Expenditures on EITC and CTC in Tax Year 2023
Tables:
Table 1: Payment Sources Offset by the TOP to Collect Non-Tax Debts Owed to DOJ in FY 2022
Table 2: Categories of Kansas Municipal Court Debt
Table 3: State Payments Offset by Kansas Debt Recovery System to Collect Municipal and District Court Debt in 2023
Table 4: Length of Collection, Amount Collected, and Number of Cases for Paid Off Accounts by Recovery Method for Kansas’ 9th Judicial District Criminal Justice Debt from 2019-2023
Table A.1: Federal Criminal Justice Debt Owed to the United States
Table A.2: Criminal Debts Owed to Third Parties
Table B.1: Subcategories of Criminal Kansas Municipal Court Debt
Table B.2: Collection of Paid-Off Accounts by Number of Months in Collection for Kansas’ 9th Judicial District Criminal Justice Debt from 2019-2023
Table B.3: Median Amount Owed, Median and Total Amount Collected and Sent to Court, and Number of Cases by Recovery Method and Whether Account Paid Off for Kansas’ 9th Judicial District Criminal Justice Debt from 2019-2023
Table B.4: Number of Kansas’ 9th Judicial District Criminal Justice Debt Accounts in Collection from 2019-2023 Based on the Year that the Case Was Filed and Whether the Account was Paid Off
Table B.5: Number of Kansas’ 9th Judicial District Criminal Justice Debt Accounts in Collection from 2019-2023 Based on the Year that Judgment Was Entered and the Year Paid Off
Table B.6: Number of Payments Collected by the Year and Month of Payment for the Kansas’ 9th Judicial District Criminal Justice Debt Accounts in Collection from 2019-2023
View & Download Full Report (PDF)

See all resources related to: ,