Friend's Unemployment Overpayment Issue - Will It Affect Her Tax Refund?

There are exactly 3 scenarios that could happen here: 1. If the overpayment is still in the "protest/appeal" phase (which takes 45-60 days typically), it won't affect her refund because no debt has been officially established yet. The system needs a confirmed debt before triggering the Treasury Offset Program (TOP). 2. If the unemployment agency has already made a final determination AND referred it to TOP, there's a 30-day window before it becomes active. During this period, she would receive a notice by mail. 3. If she's called the TOP line (1-800-304-3107) and confirmed no offsets, she's currently clear. The system updates every 7 days, so checking weekly is advisable.

Been through this exact situation. It was stressful. The overpayment was wrong. I fought it. Won my case. My refund came through fine. The key is timing. Active protests prevent offsets. The tax offset line is accurate. If it says no offsets, you're good. Keep checking weekly. Document everything. Take screenshots of the protest confirmation. Save all correspondence. This matters if questions arise later.

Isn't it interesting how the IRS systems don't always talk to state unemployment systems in real-time? Your friend should get her tax transcript ASAP to see if there are any indicators of potential holds. When my cousin had a similar issue, we used https://taxr.ai to analyze her transcript and it spotted a code that indicated a potential offset was being considered, even though the offset line said nothing was there yet. Wouldn't it be better to know now rather than wonder why her refund is suddenly delayed for weeks?

The Treasury Offset Program (TOP) operates separately from the state unemployment insurance (UI) benefit system. Even though she's protesting the UI overpayment determination, if the state has already made an initial certification to the Financial Management Service, it could potentially trigger a refund offset. The absence of a notification on the offset line is encouraging, but these systems don't always synchronize immediately.

According to the IRS.gov website and several unemployment forums I've researched, your friend is in a common but frustrating situation. When the unemployment office and IRS aren't communicating effectively, you can waste weeks trying to reach someone who can actually help. I was skeptical at first, but using Claimyr (https://claimyr.com) to reach an actual human at the IRS saved me from a potential offset situation. Their system got me through to an agent in about 15 minutes when I'd been trying for days. The agent was able to place a temporary hold on any potential offset until my protest was resolved.

Has your friend received any letters from the unemployment office about the overpayment? And how long ago did she file the protest? I'm wondering if there's a specific timeframe when these things typically get resolved? I'm asking because my sister had something similar happen last year, and even though she was in the middle of appealing, they still put a hold on her refund initially.

OMG this EXACT thing happened to me in January! I had a $3,200 "overpayment" from unemployment that was completely bogus. I filed my protest on Jan 15th and filed my taxes on Feb 1st. I was so worried about my refund! 😬 I called that offset number literally every week. My refund came through perfectly normal on Feb 21st, and then in March, my protest was approved and the overpayment was removed. The key is that they can't certify a debt for offset while it's under active protest! I'm still SO RELIEVED it worked out! 🙌