Wage garnishment is a frequently used collection strategy by the IRS, but it’s rarely understood by taxpayers with federal tax debt. When the IRS levies a taxpayer’s wages they send notice to the employer (Form 668-W) to withhold and remit the non-exempt amount of wages to the IRS until the amount owed is paid off. Of note, the employer is tasked with remitting the ‘non-exempt’ amount – not an exact amount. Accordingly, the question is not how much the IRS can levy from a paycheck, but how much a taxpayer can protect from IRS wage garnishment.
How Much Can A Taxpayer Can Protect From IRS Wage Garnishment
The IRS can’t levy a taxpayer’s entire paycheck. Fortunately for taxpayers who owe the IRS, a certain amount of money can be protected from IRS wage garnishment, and that amount generally varies with the filing status and the number of dependents. Specifically, IRS Publication 1494 identifies the amount of an individual’s income that is exempt from IRS wage garnishment. For instance, a taxpayer who is married filing jointly with 2 dependents can exempt $2,808.33 per month from an IRS wage levy.
How To Claim The Exempt Amount of Wages
The employer will give the employee whose wages are being levied a Statement of Dependent and Filing Status to complete within 3 days. The completed form will tell the employer the employee’s filing status, number of dependents, and whether the employee or their spouse is over the age of 65 or blind. With that information, the employer can calculate the amount exempt from the levy by reference to IRS Publication 1494. If the employee doesn’t complete the Statement of Dependent and Filing Status within 3 days the employer will exempt an amount as if the employee was married filing separately with zero dependents.
Will The IRS Levy Both Spouse’s Incomes?
For joint tax liabilities, the IRS will generally go after the spouse with the larger income. However, in cases of flagrant neglect or refusal to pay the IRS may seek to levy the incomes of both spouses. (See IRM 18.104.22.168.3) Moreover, if the spouses are separated the IRS may seek to levy both spouse’s incomes.
How To Stop IRS Wage Garnishment
Even if you can afford the maximum amount the IRS can garnish from your wages, you may want to explore tax resolution strategies that can stop IRS wage garnishment. To learn how to stop IRS wage garnishment, call the Law Office of Jin Kim at (916) 299-9913 for a free consultation. Through established tax resolution services our tax attorney can stop IRS wage garnishment and help you get out of tax debt.