November 22, 2024
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9,351 stimulus checks seized

AUGUSTA – Nearly all of the approximately 600,000 Mainers who qualified for a federal stimulus check have received their money – except the thousands who were unpleasantly surprised with a notice their payment had been seized by the state.

“We were surprised and pleased at the number of stimulus checks that went to families,” said Barbara Van Burgel, director of the state Bureau of Family Independence. “This is an important additional avenue that we can help families get the money to support their children.”

She had estimated earlier this year that the state would get about $1.5 million by seizing the stimulus checks being sent to Mainers. But as of this week, the state has seized 9,351 payments, which brought in $5,384,893 in past due child support.

“That is significant, particularly to those that are getting money they were owed and were not sure when they would get it,” Van Burgel said.

But even with the additional collections, it is small compared to the state’s overall child support enforcement effort. Van Burgel said last year the state collected $110 million from parents who owed child support to about 65,000 custodial parents.

She said one reason the program to seize checks for past due child support is yielding more than originally estimated is the federal requirement that a person file an income tax return to get a stimulus payment. She said many low-income Mainers do not bother to file a tax return because they have no tax liability.

Van Burgel stressed that the collection of past due child support is crucial to those parents who have custody of children. She said in these tough economic times, with high energy bills, she is happy the parents are getting a little extra help.

“It is one of the ways that families stay above the poverty line, and we know they are struggling,” she said.

Van Burgel said some custodial parents have called and expressed surprise when they received the money from the so-called stimulus “offset” program. She hopes the program will help a few more families before it ends.

As of this week, 113 million Americans have received stimulus payments totaling more than $92 billion. The Internal Revenue Service will continue to send checks to those who file their returns by Oct. 15, and the state will continue to seize the payments for child support and for back taxes.

Jerome Gerard, acting executive director of Maine Revenue Services, said that as of last week, the agency has seized 2,051 stimulus payments totaling $1,070,544 to pay state taxes that were due. He said the revenue being collected through the offsetting of stimulus payments is small compared to all tax collection efforts of the state. He estimated that as much as $65 million in overdue taxes of all types will be collected by Maine Revenue Services this year.

“This is just one more tool we have this year,” he said.

Gerard acknowledged there are some appeals of the seizure of stimulus payments, as there is when the state seizes federal tax refunds to pay state taxes. He said the state has sent checks to individuals who had met their tax obligations but still had the stimulus payment taken in error.

The purpose of the stimulus payments was to spur the economy, and Mike Allen, research director at Maine Revenue Services. He said early indications are that some of the estimated $500 million that came into the state was used to buy products and help the economy.

“Over the three months when most of the checks came into the state, we did see an upturn in sales tax revenues,” he said. “I would say we saw an impact on the economy, but not as much as there might have been if people had not been struggling with heating bills and high gasoline prices.”

Allen said while the offsets certainly had an impact on individuals, he did not think they had an impact on the effort to stimulate the economy. He said the amounts seized were small compared to the cash infused into the state.


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