KRS 131.560 — Withholding of individual income tax refund to satisfy certain liabilities -- Priority of claims

Notwithstanding the provisions of KRS 44.030 or 131.190, the Department of Revenue
shall withhold the Kentucky individual income tax refund otherwise due a taxpayer under
KRS Chapter 141 who owes overdue child support or is indebted to any state agency,
officer, board, commission, corporation, institution, cabinet, department or other state
organization, or any county, city, urban -county government, consol idated local
government, or charter county government duly organized in this state, which has
complied with the requirements of KRS 131.565. After satisfaction of any undisputed
delinquent tax liability due the Department of Revenue from such taxpayer, the tax refund
balance so withheld shall, except as provided in KRS 131.565, be transmitted as soon as
practicable to the state agency, or the county, city, urban -county government,
consolidated local government, or charter county government duly organized in this state,
having established a claim therefor. In the case of multiple state agency or any county,
city, urban -county government, consolidated local government, or charter county
government duly organized in this state claims against the same tax refund , the state
agency having the larger pending claim shall have priority after satisfaction of any
undisputed delinquent tax liabilities due the Department of Revenue, followed by other
state agency claims. After all state agency claims have been satisfied, the claims of any
county, city, urban-county government, consolidated local government, or charter county
government duly organized in this state shall be satisfied with the larger pending claims
satisfied first, and other claims satisfied in descending order.