EDD took our tax refund last year for overpayment - can they access our bank account this year?
So I'm in a mess with EDD overpayments and tax refunds. Last year, EDD intercepted our federal tax refund before it even hit our account - it was gone instantly to cover part of what we owe. This year, surprisingly, our tax refund actually made it to our bank account (it's sitting there right now). We still have an outstanding EDD overpayment balance though. My question is: Can EDD somehow reach into our bank account and take the money directly? We haven't connected our bank account to the EDD overpayment portal or anything. Does anyone know if they have authority to do that? And if they can, how quickly do they usually move to grab it? We need to plan our finances and I'm worried the money might disappear without warning.
17 comments
Join the conversation
Thais Soares
No, EDD cannot access your bank account directly unless you've given them authorization. Tax refund interception is different - that's done through the Treasury Offset Program (TOP) at the federal level or state tax authority. If your refund is already in your account, it's safe from automatic collection. What will likely happen is they'll continue trying to intercept future tax refunds or potentially garnish wages if the overpayment remains unpaid. You might want to consider setting up a payment plan with them to avoid more aggressive collection methods down the road.
0 coins
Fiona Gallagher
•Thank you for explaining that! Such a relief to know they can't just take it from our account. Do you know how I should go about setting up a payment plan? The EDD website is so confusing and I can never get through on the phone.
0 coins
Nalani Liu
THEY CANT TAKE IT FROM YOUR BANK!! But they WILL keep taking your tax refunds until its paid off!!! I've been dealing with this for 3 YEARS now and every refund gets snatched before I even see it!!! The system is totally RIGGED against us!!
0 coins
Axel Bourke
•same. they took mine 2. but i think they can garnish wages 2 if u dont pay for long enough. happened to my cousin
0 coins
Aidan Percy
They won't automatically take money from your bank account. The tax refund interception happens through the Treasury Offset Program, which is completely separate from your banking information. If you want to avoid future tax refund interceptions, I'd recommend contacting EDD to set up a payment plan. You can request this through the UI Online portal under the Overpayment section, but honestly, calling is more effective. I had luck using Claimyr (claimyr.com) to get through to an EDD rep quickly instead of waiting hours on hold. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km Once you're on a payment plan and making regular payments, they usually stop the tax intercepts as long as you're compliant with the agreement.
0 coins
Fernanda Marquez
•I was just going to suggest Claimyr! It saved me so much time when I had to deal with my EDD overpayment situation last month. I was about to give up after trying to call for two weeks straight, but got through in about 20 minutes with their service.
0 coins
Norman Fraser
when i had overpayment they took my tax refund too but never took money from my bank account. they can garnish wages tho so be careful with that. i think u have to setup a payment plan to avoid garnishment but not sure how long it takes before they do that maybe someone else knows??
0 coins
Thais Soares
•You're right about the wage garnishment. EDD typically sends multiple notices before garnishing wages. The process usually takes 3-6 months from the final overpayment notice if no action is taken. They'll send a notice of potential wage garnishment first, giving you one last chance to set up a payment plan before they contact your employer.
0 coins
Kendrick Webb
my freind had this problem and he said as long as the bank account isnt linked to your edd account they cant take anything only your tax refund
0 coins
Axel Bourke
im confused… is overpayment when u get 2 much money or when u owe them? cuz i think i might have gotten overpaid but im not sure what 2 do
0 coins
Aidan Percy
•Overpayment is when EDD determines they paid you more benefits than you were eligible for, so you now owe that money back to them. If you think you might have been overpaid, it's better to be proactive. Log into your UI Online account and check for any overpayment notices. If you see one, or suspect you might have received too much, contact EDD right away to discuss your options. Being proactive can sometimes help you avoid penalties that get added to overpayments.
0 coins
Fernanda Marquez
I had a similar situation last year with an EDD overpayment of around $4,800. They took my tax refund but never touched my bank account. From what I learned talking to an EDD representative, they can only access accounts you've explicitly authorized. However, I strongly recommend setting up a payment plan. I ignored my overpayment for about 8 months, and they eventually started the process for wage garnishment, which was a nightmare to deal with. The payment plans are actually quite reasonable - mine was only $75/month on the remaining balance.
0 coins
Fiona Gallagher
•That's really helpful to know, thank you! $75/month sounds manageable. Did you have to negotiate that amount or did they just offer it to you? I'm worried they'll want the whole amount at once.
0 coins
Hattie Carson
When this happened to me last year, I just went to a different bank and opened a new account lol. EDD has no idea where my money is now. Problem solved!
0 coins
Thais Soares
•I would strongly advise against this approach. While EDD doesn't have direct access to your bank accounts without authorization, avoiding payment doesn't make the debt go away. They can still intercept tax refunds, garnish wages, place liens on property, and even affect your credit in some cases. The debt will continue to accrue interest, making the total amount owed larger over time. Setting up a payment plan is almost always the better long-term solution.
0 coins
Nalani Liu
WAIT I just realized something!! Are you ABSOLUTELY SURE the refund is from this year's taxes?? Because last year my husband got a refund in our account in July that we thought was from that year's taxes but it was actually a DELAYED refund from the PREVIOUS year that finally processed, and then a week later our ACTUAL refund for that year got intercepted by EDD!!! Don't spend that money until you're 100% sure!!!!
0 coins
Fiona Gallagher
•Oh no, I hadn't even thought of that possibility! Now I'm worried... I'll double check with our tax preparer right away to confirm which year this refund is from. That would be devastating if we spent it and then found out our actual refund was still coming (and going to be intercepted).
0 coins