Are you in search of a tax refund status while paying student loans? What if I have a federal student loan for repayment and wages get garnished for this purpose? Can I get the tax refunds in that scenario? As per the U.S. Department of Treasury, the tax refund offset is applicable if the student wages are getting garnished against the education loans.
Can I Get the Tax Refund Against Wages Garnishment?
It might be surprising, but the garnishment of wages for paying student loans can be a tricky thing. And getting the tax refund is a relaxation that helps you to cope with the loan default. For seeking the tax refund, you first need to frame a notice informing you about the records relevant to the debt. You also have to give a loan obligation and a written agreement for the debt repayment and your hardships for the same.
After sending this notice, they will closely monitor your student loan status and the amount of wages garnished for the loan repayment. Besides, the financial situation you are also facing aids in getting the tax refunds.
However, you need to immediately bring to notice the garnishment of wages so that you can get timely tax refunds. The loan provide will review the form and then ask you to present the documentation proof as per your requirement. Your payslip can indicate the garnishment of wages for repaying student loans. Once you qualify, the tax refund can initiate, helping you to create few more savings.
How to Avoid Garnishment of wages for Paying Student Loans?
Make timely loan payments- If you fail to pay the federal student loans on time, then the fear of overdue and wage garnishment haunts you. For avoiding any financial struggles, it is ideal to repay the loans promptly.
Consider forbearance and deferment– If you find it unable to make timely payment, opt for a loan deferring alternative. After you opt for this alternative, the payment postpone is possible for the next three years. A forbearance is also an option for the eligibility rules differs for it.
Consolidation of student loans- If you face wage garnishment, opt for refinancing or consolidating student loans. This can allow you to stick with a single payment rather than opting for a multiple payments option.
Apart from all these options, there is also a student loan forgiveness plan for the people working in public services like health care, education, and other services. If you take into account all these things, timely loan garnishment might be possible. Besides, you can also request tax refunds as government exempts taxation for those paying student loans.
Key Takeaways
If your wages are getting garnished for paying off the student loans, you could receive the tax refunds quickly. It is an excellent option to bring back the money when you are under trivial circumstances. With this, you can rehabilitate the financial crisis and try to pay off the debts with the tax refund amount available!