setoff

1. The amount by which a defendant claims an award should be reduced because of an offsetting claim by the defendant against the plaintiff. For example: A plaintiff has been awarded $100,000. The defendant does not dispute the award, but claims the plaintiff owes the defendant $25,000 from another transaction. Thus, the defendant claims to owe the plaintiff only $75,000.
2. The amount by which a tax refund can be used to offset a government obligation. For example, Alabama legislation in 2004 permitted state courts to intercept state income tax refunds as setoffs to delinquent fine accounts in criminal and traffic cases.