Ind. Code ch. 6-8.1-9.5

Ind. Code ch. 6-8.1-9.5
in effect

Ind. Code § 6-8.1-9.5-1 Definitions

Sec. 1. The following definitions apply throughout this chapter: (1) "Claimant agency" means: (A) any state department, institution, commission, committee, board, division, bureau, authority, officer, official, or clerk of a circuit court; or (B) a political subdivision that has an agreement with a clearinghouse established under section 3.5 of this chapter. (2) "Clearinghouse" refers to a clearinghouse registered with the department under section 3.5(c) of this chapter. (3) "Debtor" means any person or legal entity that is delinquent in paying a debt to a claimant agency that has not been adjudicated, satisfied by court order, set aside by court order, or discharged in bankruptcy. (4) "Debt" means any liquidated amount owed and due to a Title IV-D agency of another state, or to any claimant agency which has accrued through contract, subrogation, assignment for purposes of collection, tort, operation of law, or any other legal theory, regardless of whether there is an outstanding judgment for that sum. (5) "Investment pool" has the meaning set forth in IC 5-13-9-11. (6) "Political subdivision" has the meaning set forth in IC 36-1-2-13. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985, SEC.3; P.L.277-2003, SEC.1; P.L.239-2017, SEC.24; P.L.117-2018, SEC.5.

Ind. Code § 6-8.1-9.5-2 Debt owed to claimant agency; agency's entitlement to debtor's refund

Sec. 2. If a debtor owes a claimant agency a certified delinquent debt that agency is entitled to have the department set off the tax refund against the delinquent debt. As added by Acts 1981, P.L.97, SEC.1.

Ind. Code § 6-8.1-9.5-3 Application for set off

Sec. 3. (a) To obtain a set off by the department, a claimant agency described in section 1(1)(A) of this chapter must file an application for the set off with the department before November 30 of the year preceding the calendar year in which a tax refund is payable by the department. (b) To obtain a set off by the department, a claimant agency described in section 1(1)(B) of this chapter must direct the clearinghouse with which the claimant agency has an agreement to file an application for the set off on behalf of the claimant agency before a date determined by the department and published on the department's website. (c) The department shall prescribe the form of and the contents of the application. (d) An application filed under this section is effective only for the purpose of set off of tax refunds that are payable for the calendar year for which an application is filed. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.239-2017, SEC.25; P.L.117-2018, SEC.6; P.L.1-2025, SEC.104.

Ind. Code § 6-8.1-9.5-3.5 Clearinghouse for claimant agencies that are political subdivisions; purposes; registration; agreement

Sec. 3.5. (a) As used in this section, "claimant agency" refers only to a claimant agency described in section 1(1)(B) of this chapter. (b) The department may enter into a contract with a nonprofit entity organized in Indiana that represents political subdivisions to establish a clearinghouse for the following purposes: (1) To compile and consolidate debts of claimant agencies in a format that is consistent with the department's requirements for the set off of tax refunds under this chapter. (2) To act as an intermediary on behalf of a claimant agency with respect to the department for purposes of this chapter. (3) To submit an application for the set off of tax refunds with the department on behalf of a claimant agency under section 3(b) of this chapter. (4) To provide any other assistance to a claimant agency or the department that the department considers appropriate. Assistance under this subdivision may include authorization for the clearinghouse to establish and maintain a toll free telephone number that enables a debtor to make inquiries concerning a tax refund set off under this chapter. (c) A clearinghouse must register with the department. The department may recognize only one (1) clearinghouse to represent political subdivisions at any given time. (d) A political subdivision may enter into an agreement with a clearinghouse registered under subsection (c) to carry out activities on behalf of the political subdivision as authorized in the agreement. (e) The department may adopt rules under IC 4-22-2 that set forth the procedures and format requirements that must be included in an agreement entered into under subsection (d). As added by P.L.239-2017, SEC.26. Amended by P.L.117-2018, SEC.7.

Ind. Code § 6-8.1-9.5-4 Determination of entitlement to refund; notification of claimant agency

Sec. 4. After the department receives an application for a set off pursuant to section 3 of this chapter, the department shall determine whether the debtor is entitled to a tax refund. If the department determines the debtor is entitled to a tax refund, it shall notify the claimant agency of this fact. As added by Acts 1981, P.L.97, SEC.1.

Ind. Code § 6-8.1-9.5-5 Notice by claimant agency of intent to have refund set off

Sec. 5. (a) After a claimant agency receives notice that a debtor is entitled to a tax refund from the department, the claimant agency or the clearinghouse, as provided in subsection (b), must within fifteen (15) days of the receipt of the notice of a tax refund send written notice to the debtor and the department of its intent to have the tax refund set off. This notice must clearly set forth the basis for the claim to the debt and set off. (b) An agreement described in section 3.5(d) of this chapter may provide that the clearinghouse is responsible for sending written notice to the debtor described in subsection (a) on behalf of a claimant agency described in section 1(1)(B) of this chapter. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.117-2018, SEC.9.

Ind. Code § 6-8.1-9.5-6 Contest of agency's claim; notice

Sec. 6. A debtor who receives written notice pursuant to section 5 of this chapter is entitled to contest the claimant agency's right to the debt and set off at a hearing only if the debtor, not later than thirty (30) days after the date the written notice was mailed to the debtor, mails to the claimant agency written notice that the debtor intends to contest the claimant agency's right to the debt. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.117-2018, SEC.10; P.L.150-2018, SEC.4.

Ind. Code § 6-8.1-9.5-7 Hearing on contest of agency's claim

Sec. 7. (a) This subsection applies to a claimant agency described in section 1(1)(A) of this chapter. If a claimant agency receives written notice that a debtor intends to contest its claim to a debt and set off, the claimant agency shall hold a hearing under IC 4-21.5-3. (b) This subsection applies to a claimant agency that is a political subdivision described in section 1(1)(B) of this chapter. If a claimant agency receives written notice that a debtor intends to contest the claim to a debt and set off following the notice provided under section 5 of this chapter, the claimant agency shall send written notice of and hold a hearing as provided in subsection (c). (c) A notice issued by a political subdivision under subsection (b) must state substantially the following: (1) The political subdivision's basis for the claim to the debt and set off. (2) The date on which the political subdivision submitted the debt owed by the debtor for a tax refund set off under this chapter. (3) The date, time, and place at which the political subdivision will conduct the hearing. (4) The procedures under which the hearing will be conducted. (5) A statement that in addition to the amount of the debt owed by the debtor, the total amount of the set off of the debtor's tax refund may include the following fees for processing the set off of the debtor's tax refund, as applicable: (A) The collection fee described in section 10(a) of this chapter. (B) One (1) or more local collection assistance fees described in section 10(b) of this chapter. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.7-1987, SEC.7; P.L.239-2017, SEC.28; P.L.117-2018, SEC.11.

Ind. Code § 6-8.1-9.5-8 Certification of debt; payment to agency

Sec. 8. After a final determination of the validity of a debt due a claimant agency pursuant to sections 6 and 7 of this chapter, the claimant agency shall certify to the department the amount owed by the debtor to the claimant agency that is subject to set off. Upon receipt of certification of a debt, the department shall set off the appropriate amount and pay it to: (1) the appropriate claimant agency; or (2) the clearinghouse for deposit in the clearinghouse's account in the investment pool established under IC 5-13-9-11(e). As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.117-2018, SEC.12.

Ind. Code § 6-8.1-9.5-9 Notice to debtor of action taken; accounting

Sec. 9. If the department sets off a debtor's tax refund pursuant to this chapter, it shall serve the debtor written notice of the action and an accounting of the action taken on any refund. As added by Acts 1981, P.L.97, SEC.1.

Ind. Code § 6-8.1-9.5-10 Collection fees

Sec. 10. (a) The department of state revenue may charge a debtor a fee of ten percent (10%) of any debts collected under this chapter as a collection fee for the department's services, not including any local collection assistance fees charged under subsection (b). (b) This subsection applies to a debt collected for a claimant agency that is a political subdivision described in section 1(1)(B) of this chapter. A local collection assistance fee not to exceed twenty-five dollars ($25) shall be imposed on each debt submitted by the claimant agency and collected through a set off under this chapter. The board of the nonprofit organization that operates the clearinghouse registered under section 3.5 of this chapter shall determine the amount of the fee by resolution. Notwithstanding any law concerning delinquent accounts, charges, fees, loans, taxes, or other indebtedness, the local collection assistance fee shall be added to the amount due the claimant agency when the collection is made, not including any fee charged by the department of state revenue under subsection (a). A fee collected under this subsection shall be distributed by the department to: (1) the nonprofit entity with which the department has entered into a contract under section 3.5(b) of this chapter; or (2) at the direction of the nonprofit entity, the nonprofit entity's account held by the investment pool. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985, SEC.4; P.L.103-2007, SEC.4; P.L.239-2017, SEC.29; P.L.117-2018, SEC.13; P.L.236-2023, SEC.92; P.L.230-2025, SEC.90.

Ind. Code § 6-8.1-9.5-11 Combined returns

Sec. 11. If set off is sought pursuant to the provisions of this chapter against the combined refund of taxpayers who have previously filed a combined return, the entire refund is subject to set off unless there is a timely defense raised by a co-refundee who is not a debtor as defined in this chapter. If a timely defense is raised that the refund is based on a combined application of a debtor and a nondebtor, then set off shall only be effected against the debtor's share of the refund. As added by Acts 1981, P.L.97, SEC.1.

Ind. Code § 6-8.1-9.5-12 Order of priority in multiple claims to refunds

Sec. 12. Priority in multiple claims to refunds allowed to be set off under this chapter shall be in the following order: (1) Department of state revenue. (2) Child support bureau. (3) Department of workforce development. (4) Family and social services administration for claims concerning the Temporary Assistance for Needy Families (TANF) program. (5) Family and social services administration for claims concerning the federal Supplemental Nutrition Assistance Program (SNAP). (6) Family and social services administration for claims concerning the Child Care and Development Fund (CCDF). (7) Approved postsecondary educational institutions (as defined in IC 21-7-13-6). (8) Office of judicial administration for claims concerning the court technology fund. (9) A claimant agency described in section 1(1)(A) of this chapter: (A) that is not listed in subdivisions (1) through (8); and (B) that enters into a formal agreement with the department after December 31, 2017. The priority of multiple claims of claimant agencies in this subdivision must be in the order in time that a claimant agency entered into a formal agreement with the department. (10) United States Internal Revenue Service. (11) A claimant agency described in section 1(1)(A) of this chapter that is not identified in the order priority under subdivisions (1) through (9). The priority of multiple claims of claimant agencies in this subdivision must be in the order in time that a claimant agency has filed a written notice with the department of its intention to effect collection through a set off under this chapter. (12) A claimant agency described in section 1(1)(B) of this chapter. The priority of multiple claims of claimant agencies in this subdivision must be in the order in time that the clearinghouse representing the claimant agency files an application on behalf of the claimant agency to effect collection through a set off under this chapter. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.239-2017, SEC.30; P.L.86-2018, SEC.82; P.L.146-2018, SEC.22; P.L.161-2018, SEC.16.

Ind. Code § 6-8.1-9.5-13 Disclosure of information and records; taxpayers; child support obligations

Sec. 13. (a) Notwithstanding IC 6-8.1-7 or any other provision of law prohibiting disclosure of a taxpayer's records or information, all information exchanged among the department, the claimant agency, a clearinghouse registered under section 3.5 of this chapter, and the debtor necessary to accomplish the purpose of this chapter is lawful. (b) Whenever the child support bureau of the department of child services seeks to enforce a child support obligation through a setoff against a debtor's tax refund, the department shall make the following information available to that agency and to any other state's Title IV-D agency that is enforcing the child support order against the debtor: (1) The debtor's Social Security account number (or numbers, if the debtor has more than one (1) number). (2) The debtor's home address. As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985, SEC.5; P.L.2-1992, SEC.73; P.L.145-2006, SEC.20; P.L.239-2017, SEC.31.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026