Unemployment Overpayment Waiver: How to Request Forgiveness (2026 Guide)

What You Need to Know About Unemployment Overpayment Waivers: Eligibility, How to Apply, Deadlines, and What Happens Next

If you’ve received a notice from your state unemployment agency saying you were overpaid and must repay hundreds or thousands of dollars, you’re not alone. Overpayments happen for many reasons—employer appeals that reverse eligibility, unreported earnings, agency errors, identity verification issues, and more. The good news is that many states allow you to request an overpayment waiver, which can reduce or completely forgive the amount you owe.

This guide will walk you through everything you need to know about unemployment overpayment waivers, including what they are, who qualifies, how to apply, what documents to submit, deadlines, and what happens if your waiver is approved or denied.

1. What Is an Unemployment Overpayment Waiver?

An overpayment waiver is a formal request asking your state unemployment agency to forgive (waive) or reduce the amount of unemployment benefits you were overpaid. When a waiver is granted, you do not have to repay some or all of the overpaid amount.

Overpayment vs. Waiver (Definition)

Let’s clarify the key terms:

• Overpayment: The state determines you received more unemployment benefits than you were entitled to. This can happen for many reasons (see below).
• Waiver: A process that allows you to request forgiveness of the overpayment if you meet certain criteria (typically, it wasn’t your fault and repayment would cause hardship).
• Repayment plan: If you don’t qualify for a waiver (or while your waiver is pending), you can often set up monthly payments instead of paying the full amount at once.

Common Reasons Overpayments Happen

Overpayments can occur for many reasons, including:

• Employer appeal: Your employer successfully appeals your claim, and the state reverses weeks you were already paid.
• Unreported or underreported earnings: You worked part-time or had gig income but didn’t report it correctly when certifying.
• Eligibility change: The state later determines you were not eligible (e.g., availability issue, job refusal, misconduct).
• Agency error: The state made a mistake in calculating your benefits or eligibility.
• Identity verification issues: Your claim was flagged for ID verification and later disqualified, but you already received payments.
• Pandemic-era errors: Many overpayments occurred during the COVID-19 pandemic due to rapid expansion of programs like PUA and PEUC.

An overpayment notice typically includes the reason for the overpayment, the amount you owe, and instructions on how to repay or request a waiver.

2. Waiver vs. Appeal vs. Repayment Plan (Don’t Mix These Up)

One of the biggest sources of confusion is understanding the difference between a waiver, an appeal, and a repayment plan. These are three separate processes, and in some cases you may need to pursue more than one.

When to Appeal

File an appeal if you believe the overpayment determination is wrong. For example:

• You disagree that you were overpaid at all.
• You believe the amount is incorrect.
• You disagree with the underlying eligibility decision that caused the overpayment.
• You reported your earnings correctly but the state calculated them incorrectly.

Goal of an appeal: To reverse or change the determination so that no overpayment exists (or the amount is reduced).

When to Request a Waiver

Request a waiver if you accept that you were overpaid, but you believe you should not have to repay the money because:

• The overpayment was not your fault (non-fraud).
• Repayment would cause financial hardship or be against equity and good conscience.
• You relied on the state’s decision in good faith and cannot afford to repay.

Goal of a waiver: To be forgiven from having to repay the overpayment (or to reduce the amount owed).

When to Set Up a Repayment Plan

If you do not qualify for a waiver (or while your waiver is pending), you can often request a repayment plan to pay the overpayment in monthly installments instead of a lump sum. This option is available in most states and does not require you to prove hardship—it simply spreads out the payments.

Important: You can often file both an appeal and a waiver at the same time if your state allows it. Check your overpayment notice for specific instructions and deadlines.

3. Who Qualifies for a Waiver?

Waiver eligibility rules vary by state, but most states use a two-part test:

1) Not Your Fault (Non-Fraud)

You must show that the overpayment was not your fault. This typically means:

• You did not knowingly provide false information.
• You did not intentionally conceal facts.
• The overpayment resulted from an agency error, employer appeal, or misunderstanding—not fraud.
• You reported information accurately and in good faith.

If the state finds fraud: Waivers are almost never granted. Fraud means you knowingly provided false information or concealed material facts to obtain benefits you were not entitled to. Fraud overpayments typically result in penalties, disqualification, and potential criminal prosecution.

2) Financial Hardship or Against Equity and Good Conscience

You must also show that repayment would cause financial hardship or would be against equity and good conscience. This typically involves demonstrating:

• You have limited income and essential expenses (rent/mortgage, utilities, food, medical care, childcare, etc.).
• Repayment would prevent you from meeting basic living expenses.
• You relied on the benefits in good faith and used them for necessary expenses.
• You no longer have the funds (because you used them for living expenses, not frivolous purchases).

Many states require you to submit a monthly budget worksheet showing your income and expenses to prove hardship.

4. Documents to Prepare (Checklist)

To support your waiver request, you will typically need to provide documentation proving both that the overpayment was not your fault and that repayment would cause financial hardship. Here’s what to gather:

Proof of Income & Expenses

• Recent pay stubs (last 2–3 months) or proof of current income (unemployment, Social Security, disability, etc.)
• Bank statements (last 1–2 months)
• Monthly budget worksheet (many states provide a form; list all income and essential expenses)
• Rent or mortgage statements
• Utility bills (electric, gas, water, internet, phone)
• Childcare or dependent care expenses
• Medical bills or prescriptions (if applicable)

Proof of the Overpayment Notice and Determination

• Copy of your overpayment notice (the letter explaining the overpayment)
• Copy of the underlying determination (if the overpayment resulted from an eligibility decision or employer appeal)
• Copy of any correspondence with the unemployment agency about the overpayment

Special Situations

If any of these apply to you, include supporting documentation:

• Eviction notice or foreclosure warning (if facing housing loss)
• Disability documentation (SSI/SSDI award letter, medical records)
• Proof of dependent care (children, elderly parents, disabled family members)
• Identity theft documentation (if the overpayment resulted from fraud/identity theft—see Special Cases section below)

Tip: Keep copies of everything you submit. Send documents by certified mail (if mailing) or save confirmation receipts (if submitting online or by fax).

5. How to Request an Overpayment Waiver (Step-by-Step)

The process for requesting a waiver varies by state, but the general steps are similar. Here’s what to do:

Step 1 — Read Your Notice (Deadline + Reason)

Your overpayment notice will include:

• The reason for the overpayment
• The amount you owe
• The deadline to request a waiver (typically 15–30 days, but varies by state)
• Instructions on how to file a waiver request (online, mail, fax, or in person)

Read the notice carefully. Missing the deadline can make it much harder (or impossible) to request a waiver later.

Step 2 — Decide: Appeal, Waiver, or Both

Before filing a waiver, decide:

• Do you disagree that you were overpaid? → File an appeal.
• Do you accept that you were overpaid but believe you should not have to repay? → File a waiver.
• Are you unsure? → File both (if your state allows it) to protect your rights.

Some states allow you to file both simultaneously. Others may require you to choose one or the other. Check your state’s rules.

Step 3 — Submit the Waiver Request (Online / Mail / Fax)

Most states provide a waiver request form (sometimes called an “Overpayment Waiver Application” or “Request for Waiver of Recovery”). You can typically submit it:

• Online: Through your state’s unemployment claimant portal
• By mail: To the address listed on your overpayment notice
• By fax: To the fax number on your notice
• In person: At a local unemployment office (check if appointments are required)

What to include:

• Completed waiver request form
• Copy of your overpayment notice
• Monthly budget worksheet (if required)
• Supporting documents (pay stubs, bank statements, bills, etc.)
• Written statement explaining why you believe the waiver should be granted

Step 4 — Track Status + Respond to Requests

After submitting your waiver request, the state agency will review your case. This can take weeks or months, depending on the state and caseload. During this time:

• Check your mail and email regularly for any requests for additional information.
• Respond promptly to any requests (failure to respond can result in denial).
• Log in to your state portal to track the status of your waiver.
• Keep certifying for weekly benefits if you’re still unemployed (even if you’re not currently receiving payments).

Step 5 — Hearing/Interview (If Scheduled)

Some states may schedule a hearing or interview to review your waiver request. If this happens:

• Treat it like an unemployment appeal hearing (be professional, honest, and prepared).
• Bring copies of all documents you submitted.
• Be ready to explain your financial situation and why you believe the waiver should be granted.
• Answer questions directly and truthfully.

6. Deadlines & Timing (What to Expect)

Typical Timelines

Deadlines and processing times vary by state, but here are general guidelines:

• Waiver request deadline: Typically 15–30 days from the date of your overpayment notice (varies by state).
• Review time: Can take anywhere from a few weeks to several months, depending on the state’s caseload.
• Decision notice: You will receive a written decision by mail or through your online account.

What Happens While It’s Pending?

While your waiver request is under review:

• Repayment may be temporarily paused: Some states suspend collection efforts while a waiver is pending. Others do not.
• Benefit offsets may continue: If you’re receiving unemployment benefits, the state may continue to deduct a portion of your weekly payment toward the overpayment.
• Tax refund intercepts may still occur: Depending on your state’s rules and whether the overpayment has been referred to collections.
• Keep certifying: Continue filing weekly claims if you’re still unemployed to avoid losing eligibility for future benefits.

Tip: If you’re worried about immediate collection actions, contact your state agency to ask about a temporary suspension or payment plan while your waiver is being reviewed.

7. Outcomes (Approved / Partial / Denied)

If Approved (Full Waiver)

If your waiver is fully approved:

• You do not have to repay the overpayment.
• Any benefit offsets or intercepts related to the waived overpayment should stop.
• You will receive a written decision confirming the waiver.
• Keep this decision letter for your records in case of future questions.

If Partially Approved

Some states may grant a partial waiver, meaning:

• Part of the overpayment is waived (forgiven).
• You are still responsible for repaying the remaining amount.
• You can set up a repayment plan for the balance.

If Denied: Next Steps

If your waiver is denied, you have several options:

1. Appeal the waiver denial: Many states allow you to appeal a waiver denial. Check your denial notice for appeal instructions and deadlines.
2. Set up a repayment plan: If you cannot afford to pay the full amount at once, request a monthly payment plan.
3. Request a recalculation: If you believe the overpayment amount is incorrect, ask the state to review and recalculate it.
4. Explore other relief options: Some states offer compromise agreements or settlement options for large overpayments (rare, but worth asking about).

Important: Collection tools vary by state. States commonly use benefit offsets and tax refund intercepts, and some states may use administrative wage garnishment or other collection methods after notice and due process. Always review the collection notice and your state’s rules.

8. Can the State Take My Refund or Future Benefits?

If you owe an unemployment overpayment, the state has several tools to collect the debt. Here’s what you need to know:

Benefit Offsets

What it means: If you continue to receive unemployment benefits (now or in the future), the state can automatically deduct a portion of your weekly payment to repay the overpayment.

How much: Varies by state, but typically 25%–50% of your weekly benefit amount.

What you can do: You usually cannot stop benefit offsets, but you can request a lower offset percentage if it causes hardship (approval varies by state).

Tax Refund Intercepts

What it means: In some situations, states may intercept your state tax refund and, in certain cases, your federal tax refund to repay an unemployment overpayment—depending on state rules and the type of overpayment.

How it works: States may use a state tax offset process and may also refer certain unemployment debts for federal tax refund offset through the Treasury Offset Program (TOP), depending on eligibility rules and state participation.

What you can do: You will receive a notice before the intercept occurs. You can appeal or request a waiver before the intercept happens (deadlines are strict).

Wage Garnishment

What it means: In some states, the unemployment agency can garnish your wages (take money directly from your paycheck) to repay the overpayment.

How common: Less common than benefit offsets or tax intercepts. Most states require a court order or administrative process before garnishing wages.

What you can do: If you receive a garnishment notice, you have the right to appeal or request a hardship exemption (if available in your state).

Bottom line: The state has strong collection powers, but you have rights too. Always respond to notices, request a waiver or payment plan, and explore all your options before ignoring the debt.

9. Special Cases (Fraud, Identity Theft, Pandemic Overpayments)

Fraud vs. Non-Fraud Overpayments

Non-fraud overpayment: The overpayment was not your fault (agency error, employer appeal, misunderstanding, etc.). Waivers are available if you meet eligibility criteria.

Fraud overpayment: You knowingly provided false information or concealed material facts to obtain benefits. Fraud overpayments typically cannot be waived and often result in penalties, disqualification, and potential criminal prosecution.

Identity Theft / Impostor Claims

If you did not file an unemployment claim and someone used your identity to fraudulently collect benefits, you should not be held responsible for the overpayment. Here’s what to do:

1. Report identity theft immediately: Contact your state unemployment agency’s fraud hotline and report that you did not file a claim.
2. File a police report: File a report with your local police department and get a copy.
3. File an FTC identity theft report: Go to IdentityTheft.gov and create an Identity Theft Report.
4. Submit documentation: Provide the police report and FTC report to your state unemployment agency.
5. Request removal of the overpayment: Ask the state to remove the overpayment from your account and clear your record.

Pandemic-Era Overpayments

Many overpayments occurred during the COVID-19 pandemic due to the rapid expansion of programs like PUA (Pandemic Unemployment Assistance) and PEUC (Pandemic Emergency Unemployment Compensation). Some states have special waiver programs or extended deadlines for pandemic-era overpayments. Check your state’s unemployment website for updates.

Bankruptcy

Unemployment overpayments are generally considered dischargeable debts in bankruptcy (meaning they can be eliminated). However, bankruptcy is a complex legal process with long-term consequences. If you’re considering bankruptcy, consult a qualified bankruptcy attorney. This guide does not provide legal advice on bankruptcy.

10. State-by-State Notes

Overpayment waiver rules, forms, deadlines, and eligibility criteria vary significantly by state. Here are some key differences to be aware of:

What Changes by State

• Waiver request form: Each state has its own form (name and format vary).
• Deadline: Typically 15–30 days from the overpayment notice date, but some states have longer or shorter deadlines.
• Standard of “fault”: Some states use a strict “not your fault” standard; others are more flexible.
• Benefit offsets: The percentage of weekly benefits that can be offset varies (usually 25%–50%).
• Tax refund intercepts: Some states participate in the federal Treasury Offset Program (TOP); others use state-level intercepts only.
• Hearing/interview: Some states automatically schedule hearings for waiver requests; others review them administratively.

Select Your State

For state-specific overpayment waiver information, forms, and deadlines, visit your state’s unemployment agency website or check back here as we add state-by-state guides.

11. Frequently Asked Questions (FAQ)

12. Official Resources & Next Steps

Here are the most reliable official resources for unemployment overpayment waiver information and assistance:

Federal Resources

• CareerOneStop — State Unemployment Agencies: Directory of all state unemployment agency websites and contact information.
• IdentityTheft.gov: Report identity theft and create an Identity Theft Report.
• Treasury Offset Program (TOP): Information about federal tax refund offsets for debt collection.

Legal Assistance

• Legal Services Corporation (LSC): Find free legal aid near you.
• LawHelp.org: State-by-state directory of legal aid organizations and self-help resources.

Related Guides

• How to Appeal a Denied Unemployment Claim
• Unemployment Extension 2026 (Guide)

Next Steps

1. Read your overpayment notice carefully: Note the deadline, reason, and amount.
2. Decide whether to appeal, request a waiver, or both: If you disagree with the overpayment, appeal. If you accept it but can’t repay, request a waiver.
3. Gather documentation: Pay stubs, bank statements, bills, budget worksheet, and any evidence supporting your case.
4. Submit your waiver request before the deadline: File online, by mail, or by fax (keep proof of filing).
5. Keep certifying for weekly benefits: Continue filing weekly claims if you’re still unemployed to avoid losing eligibility.