XL EagleTreasury offset (Treasury Offset Program)
Treasury offset stands for Treasury Offset Program. The Treasury Offset Program, run by the Bureau of the Fiscal Service, matches federal payments against a database of delinquent debts owed to federal agencies and states. If a match is found, part or all of the payment can be taken to pay the debt.
For contractors, this can include unpaid federal taxes (through the related federal payment levy process) and other debts owed to government agencies. You should receive notice of the debt and offset, but the money may already be withheld.
Why it matters to a small contractor
If a federal payment arrives short, an offset may be why. Resolve old tax or agency debts before you start federal work, because they can quietly eat into the money you need for payroll and subs.
Example
A small HVAC company invoices a federal job but receives less than expected. A notice explains that part of the payment was offset for an unpaid federal tax balance from a prior year.
Treasury offset: common questions
How do I find out why my payment was offset?
The offset notice names the agency owed. Contact that agency, since Treasury itself cannot change or explain the underlying debt.
Can an offset happen to a subcontractor?
Offsets apply to federal payments made to the debtor. A subcontractor paid by a prime is not paid directly by the government, so a prime's offset should not reduce the sub's payment.
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