How to Respond to a Maryland Notice of Intent to Offset

A Maryland Notice of Intent to Offset from the Central Collection Unit (CCU) tells you the state plans to take your income tax refund to pay a debt a state agency says you owe. You have 30 days before the CCU certifies that debt to the Comptroller, and within that window you can force the CCU to investigate and, if it’s wrong, stop the offset before your refund is ever touched.¹ The most common mistake is treating the letter as informational. It isn’t. It’s a countdown.

What the Notice Means and When Things Happen

The notice states the amount the CCU claims you owe, the basis of the debt, and your rights to challenge it. The statute requires the CCU to send it at least 30 calendar days before certifying the debt to the Comptroller.¹ Certifications go to the Comptroller by November 1 for refunds payable the following year, which is why these notices typically arrive in the fall.²

Once the debt is certified, the Comptroller flags your Social Security number. When you file your Maryland return, the Comptroller withholds either the full refund or the certified debt amount, whichever is smaller, and sends it to the CCU. Anything left over is paid to you. The Comptroller then sends a second notice confirming what was withheld and reminding you of your dispute rights. If one year’s refund doesn’t cover the debt, the certification stays active and the Comptroller keeps withholding future refunds until the balance is paid.³

Request an Investigation Within 15 Days

Your first move is a written request that the CCU investigate the debt. The regulations give you 15 days from the pre-certification notice to submit that request.² Miss it, and you can still request an investigation later, but only after your refund has already been taken (more on that below). Acting on the first notice is far better, because your money hasn’t left your account yet.

Send the request to the CCU in writing. Include:

Your full name and Social Security number
The CCU account or debtor number from the notice
A clear statement of why the debt is invalid or the amount is wrong
Supporting evidence: cancelled checks, bank statements, prior correspondence showing the debt was paid or settled, corrected tax filings, anything documenting your position

The CCU must issue a written determination within 15 days of receiving your request.⁴ If the investigation shows the CCU is wrong, it must correct the certification, stop the process, or refund anything already withheld. Put your request in writing and keep proof of mailing. A phone call does not satisfy the statute.

If the Investigation Goes Against You: Hearing and Appeal

An adverse determination isn’t the end. You have 30 days after the CCU mails that determination to request an administrative hearing in writing.⁵ The CCU will notify you of the hearing date within 15 days of receiving your request and give you at least 5 days’ notice of the location.²

Hearings follow Administrative Procedure Act rules. You cannot re-litigate issues already decided in a prior legal proceeding. The referring state agency can be made a party. If you don’t show up and don’t contact the CCU within 5 days of the scheduled date, your request is considered abandoned.²

The CCU’s post-hearing decision is final agency action. From there, you can appeal to circuit court under the judicial review provisions for contested cases in the State Government Article.⁵ Most disputes settle at the investigation or hearing stage; judicial review is the last stop.

If You Missed the 15-Day Window

If you didn’t respond to the original notice and your refund has already been taken, you still have a second chance. You have 30 days after the Comptroller notifies you that your refund was withheld to request an investigation.⁴ The procedure and evidence are the same. If the CCU finds the debt was wrong, it has to refund what it improperly withheld. The downside is obvious: you’re arguing to get your money back rather than to keep it.

If the Debt Belongs to Your Spouse

If you filed a joint Maryland return and the debt is your spouse’s alone, the Comptroller cannot take your share of the refund. The statute is explicit that the portion attributable to the non-obligated spouse is off-limits.³ To claim that protection, file Form 502INJ with your Maryland return to allocate income and withholdings between you and your spouse.

If a federal refund has been intercepted for your spouse’s state debt, that goes through a separate program (the federal Treasury Offset Program). The equivalent protection is IRS Form 8379, Injured Spouse Allocation, which you can file with your federal return or afterward to recover your share.⁶

Why the Balance Looks Higher Than You Remember

The amount on your notice is almost certainly larger than the original debt. The CCU adds a collection fee to every account: 10 percent of proceeds for accounts referred only for the tax refund intercept, and 17 percent for broader CCU collection.⁷ The statute caps the fee at 20 percent of outstanding principal and interest, and the CCU has discretion to waive or reduce it.⁸

Interest also accrues on the underlying debt at the rate set by law or contract for that obligation. Partial payments from an offset are applied to accrued interest first, then to principal.³ That ordering matters: your principal balance drops slower than you’d expect, and a small annual refund can leave the debt on your record for years. If the balance itself is correct but you can’t pay it, contact the CCU about a payment arrangement instead of just letting offsets chip at it.

Protections and Related Programs to Know About

Social Security and SSI benefits cannot be seized by execution, levy, attachment, garnishment, or other legal process under federal law.⁹ The Maryland offset program targets tax refunds, not bank accounts, so this protection matters mainly if the CCU also pursues you through other collection methods.

Filing bankruptcy triggers an automatic stay that generally halts collection, including setoffs for pre-petition debts. There is one significant exception: the stay does not prevent interception of a tax refund to collect child support arrears.¹⁰ For other state debts, bankruptcy may pause the offset; whether the debt is dischargeable depends on its nature and age.

Finally, if you also received a notice about your federal tax refund from the Bureau of the Fiscal Service, that is the federal Treasury Offset Program, a separate system with its own notice and hearing process administered through the referring agency.¹¹ Responding to the Maryland CCU does not resolve the federal offset, and vice versa. Treat them as two separate disputes.

How to Reach the CCU

Send written dispute requests to the CCU and keep proof of mailing. You can also call 410-767-1220 or toll-free 1-888-248-0345, or email ask.ccu@maryland.gov. Include your full name and CCU debtor or account number in every message. An online portal is available at ccuportal.md.gov for account tasks. For anything the statute requires in writing, put it in writing.

1
New York Codes, Rules and Regulations. Maryland Code Tax-General 13-914 – Notice of Intent to Withhold Income Tax Refund
2
Library of Maryland Regulations. COMAR 03.04.05 – Tax Refund Intercept Program – Delinquent Debts
3
Maryland General Assembly. Maryland Code Tax-General 13-915 – Certification to Comptroller and Withholding of Refund
4
Maryland General Assembly. Maryland Code Tax-General 13-916 – Investigation
5
New York Codes, Rules and Regulations. Maryland Code Tax-General 13-917 – Notice and Hearing, Appeals
6
Internal Revenue Service. Injured Spouse Relief
7
Library of Maryland Regulations. COMAR 17.01.01.07 – Charges for Collections
8
Maryland General Assembly. Maryland Code State Finance and Procurement 3-304 – Central Collection Unit Powers
9
Office of the Law Revision Counsel. 42 USC 407 – Assignment
10
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
11
Bureau of the Fiscal Service. Treasury Offset Program