Your Tax Return or Lottery Money Was Sent to EDD

A Notice of Overpayment is mailed to you when you have been paid UI benefits that you were not eligible to receive. The Notice shows the amount of the overpayment and penalties, if any. It explains why you were overpaid and gives you information about your appeal rights.

The EDD classifies overpayments into two categories: non-fraud or fraud.

Non-Fraud: When you have received benefits to which you were not entitled and you are not at fault, the overpayment is considered non-fraud. In some cases, you may not have to repay a non-fraud overpayment. You will receive a notice telling you if the overpayment must be repaid.

Fraud: When you knowingly give false information or withhold information and receive benefits that you should not have received, the overpayment is considered fraud. Withholding or giving false information to obtain unemployment insurance benefits is a serious offense that can result in criminal prosecution. When a fraud overpayment occurs, you are assessed a penalty in the amount of 30 percent of the amount of the overpayment and a false statement disqualification of 5 to 23 weeks. Fraud overpayments and penalties must be repaid.

If you do not repay your overpayment promptly, EDD will deduct the money owed from your future weekly unemployment or state disability insurance benefits. This process is referred to as an offset. EDD may also:

  • Reduce or totally withhold your state income tax refunds, lottery winnings, or any other money owed to you by the state.
  • File a claim against you in court, charge you court costs and interest, and record a lien on your property.

Refer to Overpayments for more information on the Benefit Payment Control (BPC) program purpose and legal authority.

NOTE: Repaying an overpayment does not remove a disqualification. Call EDD for more information.

Franchise Tax Board

In order to collect money that is owed to the Department, we work with the Franchise Tax Board to intercept any tax refund to which you may be entitled. Government code Section (§) 12419.5 authorizes the Controller, in his or her discretion, to offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The notice you received from the Franchise Tax Board shows how much money was intercepted and the date it was sent to the EDD. If you feel the amount intercepted was incorrect, or you do not owe money to us, contact us immediately. You can write by using the address provided in the Franchise Tax Board notice or call EDD at 1-800-676-5737 to resolve the issue.

State Lottery

In order to collect money that is owed to the Department, we work with the State Lottery to intercept any lottery winnings you may try to claim. Government code Section (§) 12419.5 authorizes the Controller may, in his or her discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency.

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