HFSChild Support

Interest Policy

Effective  January  1,  2021,  all  unadjudicated  interest  will  be  removed  from  the  balance being enforced  by  DCSS.   Additionally,  DCSS  will  no  longer  automatically  charge  interest  on past-due balances.  After certain criteria are met, as detailed below, customers will have the opportunity to request adjudication and enforcement of interest. 


➢  Adjudicated Interest Requests
➢  Interest Legislation
➢  Interest Payments/IRS Form 1099-INT
➢  Interest Rate


Adjudicated Interest Requests


The amended procedures to establish and enforce interest became effective January 1, 2021, signed
into law as Public Act 101-0336 on August 9, 2019.

 
As of January 1, 2021, DCSS no longer establishes interest for every case.  Interest is only
established and/or enforced for participants meeting the criteria contained in 89 Ill. Adm. Code
160.89.  Interest is only assessed when your youngest child has emancipated, no current or past due
support remains due, and your written request is received by the Department within one year of
qualifying for interest enforcement.  See link below for entire rule.
 
An opportunity to request interest adjudication, through the Department of Healthcare and Family
Services, will be available at the end of your case when you receive the HFS 3268 Notification of
Case Closure.  Requests can be made by returning the Response page of the HFS 3268 to the address
provided on the form.  The box asking the Department to review your case to assess interest should
be checked.
 
Note:  Interest payments are not considered child support payments and are taxable as interest
income.
 
Interest Legislation
 

Public Act

 


Illinois Statutes

 

 


Interest Payments

Interest is not paid until all principal balances are satisfied.  Although interest is collectible
as if it were child support, it is not the same as child support debt.  It is
considered to be “income” to the family.  In accordance with the Internal Revenue Code, payments
sent to the custodial parent on interest balances are taxable.
 
Therefore, at the end of January each year, Custodial Parents may be sent as many as
two IRS Form 1099‐INT statements for interest paid of $600.00 or more during the previous
tax year. The Department of Healthcare and Family Services (HFS) will send IRS Form
1099‐INT for interest paid through the SDU and the Comptroller will send IRS Form 1099‐ INT for
interest paid through their office.   (Note:  The Comptroller’s office sends out their IRS Form
1099 on interest payments of $10.00 or more.)
 
To determine if the $600.00 threshold is met, the total combined interest paid through the SDU and
interest paid through the Comptroller must be added together. The threshold is not $600.00 for the
Comptroller and $600.00 through the SDU. It is $600.00 total.
 
Interest on child support debt cannot be collected through the following OCSE Federal Offset
Program (FOP).
 
•            Federal Income Tax Refund Offsets.
•            Administrative Offsets (vendor payments, federal retirement payments, miscellaneous
payments).
•            Passport Denial payments,
•            MSFIDM payments.
 
The expansion of the FOP to include Administrative Offset, Passport Denial and MSFIDM was only for
the purpose of assisting in the collection of delinquent child support debts. Since interest is not
child support, these remedies cannot be used for the collection of interest.

Interest Rate

There is a 9% annual interest rate on past-due child support in Illinois.  When adjudicated
interest calculations of Interest are completed, interest will be calculated by applying
one-twelfth of the statutory interest rate (9% divided by 12 months = .0075) to the
unpaid support balance at the end of each calendar month.

 

Additional Resources


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Child Support

 

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