Attention Participants: In accordance with House File 2565, signed by Governor Reynolds in 2020, the State of Iowa Setoff Program will be administered by the Iowa Department of Revenue (IDR), instead of the Department of Administrative Services (DAS), effective November 13, 2023. Please review this Memo dated August 8, 2023, Termination of Memorandum of Understanding for Participation in the Income Offset Program for additional information and key dates regarding the transition.
The Offset Program
This program is a successful method used by the State of Iowa to collect money owed to the State under Chapter 8A.504 of the Code of Iowa. The Iowa Code directs the Department of Administrative Services, State Accounting Enterprise (DAS-SAE) to establish and maintain a procedure to collect against any claim owed to a person by a state agency, and then apply the money owed to the person against the debt owed by the person to the State of Iowa.
Debt recovered through this program
DAS has consistently seen an increase in the amount of recovered funds for the taxpayers and citizens of Iowa through most years. This has been accomplished through the Code of Iowa, which allowed local entities to participate in the program and requiring certain casino winnings to be offset for individual debt. In January 2009, casinos in Iowa began participation in the Offset Program. This successful program, permitted under Chapter 99D.28 and Chapter 99.F.19 of the Code of Iowa, allows offsets of casino jackpots and other winnings in excess of set amounts, recovering debt for Iowa and other entities as outlined in the Code of Iowa. Over 500 entities currently participate in the Offset Program.
State Agency Participation
"State agency" means a board, commission, department, including the department of administrative services, or other administrative office or unit of the state of Iowa or any other state entity reported in the Iowa comprehensive annual financial report, or a political subdivision of the state, or an office or unit of a political subdivision. "State agency" does include the clerk of the district court as it relates to the collection of a qualifying debt. "State agency" does not include the general assembly or the governor.
Participation in the Offset Program
A signed agreement between the Director of the offsetting agency (state agency or political subdivision that is owed money) and the Director of the Department of Administrative Services is required.
How is this implemented?
Before an individual or company is placed on the Offset Program, the offsetting agency must make a good faith attempt to collect the debt from the entity. The attempts to collect should be documented and retained by the offsetting agency. If resolution does not occur and the debt is at least $50.00, the agency may then include the liability with the Income Offsets Program.
Where does the match come from?
A few examples of where matches can come from are tax refunds, Iowa Lottery winnings, and payments to vendors for goods and services.
Benefits of the Offset Program
Citizens, customers and agencies of the State of Iowa are able to receive funds owed to them that they might not otherwise have a means of collecting.
Offset Program Participation
We welcome inquiries about the program. Send your email to the Offset Program.
History of the Offset Program
In the early 1970s, the Department of Revenue and Finance held income tax refunds for liabilities owed to the Department. In the late 1970s, income tax refunds were allowed to be held for other state agencies, and in 1989 the program expanded to payments issued to vendors.
The program continued through the years, switching departments in 2003 when the Finance section of the Department of Revenue and Finance was absorbed by the Department of Administrative Services. The new home for the Offset Program became the State Accounting Enterprise.
In 2005 a pilot project brought other branches of Iowa government into the Offset Program. The pilot project included up to (but no more than) five pilot agencies to be selected from interested cities, counties, municipal utilities or community colleges. In 2006 this pilot project was deemed a success and the Offset Program was made available to other state agencies. This method for recovering funds owed the State was expanded in January 2009 by including Iowa casinos in participation of the Offset Program, allowing offsets of casino jackpots and other winnings in excess of set amounts.
In 2019, in conjunction with legislation enacted allowing gambling on college and professional sports in the State of Iowa, the Offset Program began recovering funds owed through the offset of sports wagering winnings.
The Offset Program remains a successful method to collect money owed the State, as allowed by the Code of Iowa.