Remitting Payments
State Disbursement Units
Federal law requires all states to establish one place to which employers can remit child support payments. All but two states have established State Disbursement Units (SDUs) that centralize the collection and disbursement of specified child support payments. Federal law requires SDUs to process all payments under orders (1) in all IV-D cases and (2) in all non IV-D cases in which the support order was initially issued in the state on or after January 1, 1994, and in which the income of the noncustodial parent is subject to withholding. Some states require that payments for all cases - IV-D and non IV-D, regardless of date - and for spousal support be remitted to the SDU. Cases that are not processed through the SDU are typically handled locally at county offices or courts as they were before SDU implementation, or paid directly to a party.
A "IV-D case" is a child support case where at least one of the parties, either the custodial party (CP) or the noncustodial parent (NCP), has requested or received child support services from the state child support enforcement agency.
A "non IV-D case" is a child support case handled by a private attorney as opposed to the state child support enforcement (IV-D) agency. The state child support enforcement agency has received no application for services or fee for services from either parent in a non IV-D case.
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With the implementation of centralized collections handled by an SDU, custodial parents benefit because states are required to distribute payments within two business days after receipt. Benefits to employers sending checks to fewer locations in a state include:
- Reduced check processing costs;
- Fewer errors; and
- Opportunity to use electronic transmission of payments and payment mechanisms.
Click here for a list of contact information in all SDUs.
Federal Payments
Most Federal agencies arrange to have their payroll functions performed by the approximately 35 Federal payroll agencies. (By late 2004, 22 Federal payroll agencies for Executive Branch agencies will be consolidated into four payroll centers.) These Federal payroll agencies prepare payroll files, which are then sent to the Financial Management Service (FMS) for issuance of payments. The Financial Management Service, a bureau of the U.S. Department of the Treasury, is the principal disbursing agent of the Federal government. FMS issues approximately 85% of all Federal payments. A few Federal agencies, e.g., the Department of Defense, have either statutory or delegated authority to issue their own payments, which account for the remaining 15%. The FMS has four Regional Financial Centers and a Debt Management Operations Center, which actually process and mail the checks or send payments electronically (located in Austin, Birmingham, Kansas City, Philadelphia and San Francisco).
Federal payroll agencies should include the following data elements on every U.S. Treasury salary check deduction for child support:
- Social Security number of noncustodial parent
- Name of noncustodial parent (NCP) or payor
- Case or member identification number
- Amount of payment
- Date of payment
- Name and address where the check should be sent.
If this information is not included, the state child support enforcement agency cannot properly credit the noncustodial parent for the payment, and the child will not receive the support in a timely fashion.
 
