Your Income Tax Refund, Lottery Winnings, or Unclaimed Property Funds Were Sent to the EDD

The Employment Development Department (EDD) works with the Internal Revenue Service (IRS), the State of California Franchise Tax Board (FTB), the California State Lottery, and the California State Controller to collect any outstanding debt that you owe due to an overpayment of Unemployment Insurance (UI) benefits.

A Notice of Overpayment was mailed to you because you received 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 may deduct the money owed from your future weekly UI or State Disability Insurance (SDI) benefits. This process is referred to as an offset. EDD may also collect your unpaid debt by the following methods until the debt is paid in full:

  • Referring your UI debt to the IRS and FTB to reduce or withhold any federal and state income tax refunds.
  • Notifying the State Lottery to reduce or withhold any lottery winnings.
  • Notifying the State Controller to reduce or withhold any funds from unclaimed property.
  • Filing a claim against you in court, charging you court costs and interest, and recording a lien on your property.

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

Federal Income Tax Refund Reduced by the Internal Revenue Service Treasury Offset Program

The Internal Revenue Service (IRS), through the Treasury Offset Program (TOP), withheld all or a portion of your federal income tax refund to repay your State of California UI fraud overpayment debt. The TOP is authorized by federal law under Title 26, United States Code Section 6402 (f) to collect UI overpayments due to fraud. The Notification Offset Letter you received from the IRS shows how much money was withheld from your refund, including the processing fee, and the date it was sent to the EDD. If you believe the amount withheld was incorrect, or you do not agree that you owed money to us, you can write to: Employment Development Department, Benefit Overpayment Collection Section, P.O. Box 826218, MIC 91, Sacramento, CA 94230-6218, or contact us immediately by calling 1-800-676-5737 to resolve the issue.

Refer to Treasury Offset Program (TOP) Frequently Asked Questions (FAQs) for more information on how the EDD will be participating in the Treasury Offset Program.

The U.S. Department of the Treasury provides Treasury Offset Program (TOP) Questions Most Frequently Asked by the Public on its website with information about the TOP.

California State Income Tax Refund Reduced by the Franchise Tax Board

The State of California Franchise Tax Board (FTB) withheld all or a portion of your California state income tax refund to repay your UI overpayment debt. Government Code Section (§) 12419.5 authorizes the Controller, in his or her discretion, to offset any amount due to 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 FTB shows how much money was withheld and the date it was sent to the EDD. If you believe the amount withheld was incorrect, or you do not agree that you owed money to us, you can write to: Employment Development Department, Benefit Overpayment Collection Section, P.O. Box 826218, MIC 91, Sacramento, CA 94230-6218, or contact us immediately by calling 1-800-676-5737 to resolve the issue.

California State Lottery Winnings Withheld

The California State Lottery withheld all or a portion of your lottery winnings to repay your UI overpayment debt. 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. If you believe the amount withheld was incorrect, or you do not agree that you owed money to us, you can write to: Employment Development Department, Benefit Overpayment Collection Section, P.O. Box 826218, MIC 91, Sacramento, CA 94230-6218, or contact us immediately by calling 1-800-676-5737 to resolve the issue.

California Unclaimed Property Funds Withheld

The State Controller withheld all or a portion of the funds from your unclaimed property to repay your UI overpayment debt. Unclaimed property includes items such as uncashed cashier’s checks or money orders, life insurance benefits, dormant bank accounts, stock dividends and other similar items. Government Code Section (§) 12419.5 authorizes the Controller to deduct any amount due a state agency from a person, against any amount owing that person from any Unclaimed Property. If you believe the amount withheld was incorrect, or you do not agree that you owed money to us, you can write to: Employment Development Department, Benefit Overpayment Collection Section, P.O. Box 826218, MIC 91, Sacramento, CA 94230-6218, or contact us immediately by calling 1-800-676-5737 to resolve the issue.

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