Refund Offset Due to Unemployment - Hardship Appeal Options?

I just received my tax refund and noticed exactly $1,842.73 was withheld due to an unemployment overpayment from 2023. I wasn't expecting this offset since I reported all unemployment income ($14,280) correctly on my return. I'm currently the primary caregiver for my mother who has significant medical expenses, and I was counting on the full refund amount to cover her upcoming treatments. Has anyone successfully filed a hardship claim to recover offset funds? I've researched Form 911 (Taxpayer Advocate) but I'm not sure if this is the correct approach. Looking for collaborative input on the most efficient process to appeal based on financial hardship.

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8 comments

Nina Chan

I successfully got my offset refund back last year through a hardship waiver! Here's exactly what worked: 1. First, contact your state unemployment office (not the IRS) to confirm the overpayment details 2. Request their specific hardship application form - each state has different requirements 3. Document ALL your caregiver expenses in detail - include receipts and upcoming medical bills 4. Submit a detailed financial statement showing your income vs. expenses 5. Include a personal statement explaining your mother's medical situation 6. Request expedited processing due to medical necessity I submitted everything on a Tuesday and had approval by Friday the following week. The refund took another 10 days to process.

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Ruby Knight

This is mostly accurate, though I should perhaps clarify that timeframes can vary significantly by state. In my experience as a tax professional, hardship waivers for unemployment offsets typically take anywhere from 3-6 weeks to process, depending on the state's backlog. It's also worth noting that some states, such as California and New York, may have more generous hardship provisions than others. Your documentation should ideally include at least 3 months of expense records to establish a pattern of financial need.

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Diego Castillo

I was in a similar situation with medical bills piling up. Spent days trying to understand my offset. Eventually used https://taxr.ai to analyze my tax transcript and it immediately showed the offset code and explained exactly which agency took the money. Saved me from calling the wrong departments. The transcript analysis pointed me directly to my state unemployment office instead of wasting time with the IRS. I'm still working through the hardship process, but at least I'm talking to the right people now.

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Logan Stewart

Just want to add - be careful about expectations with hardship claims. I filed one on January 17th this year and while it was eventually approved, the money took until March 2nd to actually arrive. The process varies dramatically by state. Some states like California have clear hardship guidelines while others make it nearly impossible. Document EVERYTHING and be prepared for multiple follow-ups. These agencies don't make it easy, but persistence pays off if you have legitimate hardship circumstances.

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- 16d