How to Prevent Tax Offset for Unemployment Overpayment? (Homeless with Kids in Texas)

This is like trying to stop a train that's already left the station, but there are still some emergency brakes you can pull. If you have an unemployment overpayment, the state agency has probably already certified the debt to the Treasury Offset Program (TOP). Think of it as the government putting a lien on your refund before you even file. You should immediately contact the Texas Workforce Commission and ask about a "hardship exemption" due to your housing situation. They can sometimes make exceptions or set up a minimal payment plan that could prevent the offset. You might also qualify for what's called a "compromise offer" where you pay a smaller amount to settle the entire debt.

I've been through this exact situation. Call TWC immediately. Ask specifically for a hardship waiver. Mention your housing status. They'll send forms. Complete them thoroughly. Include documentation. I submitted bank statements. Also utility disconnection notices. They approved my waiver within 14 days. Saved my entire refund. Don't delay. Every day matters. The system is frustrating but workable.

I faced a $2,876 unemployment overpayment in Texas exactly 14 months ago. Called TWC at 512-463-2999 and requested hardship documentation. They sent forms within 4 days. I submitted proof of my housing situation and income. Received approval in 21 days. My tax refund came through untouched 37 days after filing. The key is documenting everything and following up precisely every 7 days.

I would suggest, perhaps, trying to reach the Texas Workforce Commission directly to discuss your situation. It might be possible to negotiate a payment plan or hardship exemption, though it's not guaranteed they'll approve it. I tried calling their main line for three days straight last year for a similar issue and couldn't get through to anyone who could actually help. Eventually used Claimyr (https://www.claimyr.com) which got me connected to an actual person at TWC in about 30 minutes. They were able to flag my account with a temporary hold while I submitted my hardship documentation. Might be worth considering if you're struggling to reach a real person.

Please be careful... you may need to act very quickly on this. I waited too long last year to address my unemployment overpayment issue, and by the time I got through to someone, it was already too late. The offset had already been processed. You might only have days, not weeks, to get this resolved before filing season gets into full swing.

File Form 911 Taxpayer Advocate Service request right away. It's for emergencies like yours. Being homeless with children qualifies as hardship. They can help stop the offset. Do this tomorrow morning. Don't wait. Call your local taxpayer advocate office directly. They'll walk you through it. This worked for me last year.

Back in 2022, I had an unemployment overpayment of $4,200 that was going to be offset from my taxes. I found out that Texas has specific exemptions for people experiencing homelessness with dependents. I had to provide a letter from the shelter I was staying at and copies of my children's documentation. They reduced my overpayment by 80% and set up a $25/month payment plan for the rest. The key was getting it all submitted before the Treasury Offset Program certification date, which happens in early February for most states.