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State of Arizona
Department of Revenue

E-File Information and Publications for Tax Professionals

Refund Offsets

If a taxpayer and/or their spouse owe money to the Arizona Department of Revenue or another agency, the amount owed may be deducted from their expected refund. The Arizona Department of Revenue offsets as much of the refund as is needed to pay off overdue taxes owed by taxpayers and notifies them when this occurs. The Debt Set-Off Office also offsets taxpayers’ refunds to pay off past-due child support or Federal agency debts, such as student loans. Offsets to non-tax debts occur after the Arizona Department of Revenue has certified the refunds and before making the Direct Deposits or issuing the paper checks.

Refund offsets reduce the amount of the expected Direct Deposit or paper check and will delay the issuance of the remaining refund (if any) after offset. If taxpayers owe non-tax debts, they may contact the agency they owe, prior to filing their returns, to determine if their debts were submitted for refund offset. The Arizona Department of Revenue cannot determine prior to the filing of a return whether refunds will be offset for non-tax debts. The Arizona Department of Revenue sends taxpayers offset notices if any part of their refund is applied to non-tax debts. Taxpayers should contact the agencies identified in the offset notice when offsets occur if they dispute the non-tax debts or have questions about the offsets.

Refund Anticipation Loans

If you offer refund anticipation loans, be aware Arizona will “offset” a refund to satisfy obligations owed to the state or another qualifying entity, such as the IRS. It is the responsibility of the Refund Anticipation Loan originator to ask the taxpayer if an offset might occur.

Arizona’s Claim of Right Provision

Individual returns for tax years 2015 and prior that are claiming a Claim of Right provision cannot be filed electronically.  If you are claiming this provision the tax return must be filed by paper.