Issues with Income Tax Refunds
At the law offices of Ryan J. Ruehle, with three convenient locations in Cincinnati, West Chester and Northern Kentucky, it is our duty to help you keep as much of your income tax refund as possible.
Many clients who are seeking debt relief in bankruptcy proceedings are surprised to find that if they file a chapter 7 or chapter13 their annual state and federal income tax refunds are considered an asset of the bankruptcy estate. The question often asked: ”Is the court going to take my tax refunds?” The short answer is it depends.
Kentucky residents filing chapter 7 have generous bankruptcy exemptions and depending on many factors can usually keep most if not all of their tax refunds.
Recent changes in Ohio law now exempt income tax refunds portions derived from the child tax credit and the earned income credit. For many, this is the main source of the their tax refund dollars and Ohio clients filing chapter 7 normally get to keep this portion of the refund and more.
Depending primarily on when they file their petition, Chapter 13 Ohio and Kentucky clients reorganizing their debts can retain their tax refund or pay it into the plan.
