IRS Wage Garnishments
A wage garnishment is a type of IRS seizure otherwise known as a levy. Employers generally have at least one full pay period after receiving a Form 668-W, Notice of Levy on Wages, Salary and Other Income before they are required to send any funds from their employee’s wages that were the result of any IRS wage garnishments. If an employee has had a levy placed on their wages, they should contact us as soon as possible to discuss a release of levy and get help to remove their IRS wage garnishments.
Whenever there are IRS wage garnishments, in which the IRS levies your wages, salary, federal payments or state refunds, the levy will only end when:
- The levy is released,
- You pay your tax debt, or
- The time expires for legally collecting the tax.
The tax code limits only how much of your paycheck that the IRS is required to leave for you. The IRS will take as much as possible when it does IRS wage garnishments and it will leave you with only the amount that the tax code says is necessary for you to pay for basic living necessities. The amount of your paycheck that you get to keep after the IRS wage garnishments corresponds to the number of exemptions you claim on your tax returns. Refer to this IRS table to see how much of your wages are protected from IRS wage garnishments.
For example, a single person getting paid semi-monthly and claiming two exemptions will only be allowed to keep $587.50. A married person filing a joint return, getting paid bi-weekly, and claiming three exemptions will only be allowed to keep $932.69. Anything over and above these amounts gets garnished and sent to the IRS.
Bank Account Seizures
If the IRS levies your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This holding period allows time to resolve any issues about account ownership. After 21 days, the bank must send the money plus interest, if it applies, to the IRS. To discuss your situation, call us today so we can provide a solution to resolve this serious matter.
Our tax professionals are adept at helping Clients deal with IRS wage garnishments and bank account seizures. Call us so we can get these removed!