Federal Wage Garnishment Laws
There are many ways to avoid wage garnishments from happening, but once a consumer is faced with a wage garnishment, it is very important that they become well versed in the federal wage garnishment laws that are designed to protect them. People can enter into wage withholding situations voluntarily with the IRS, and not all wage garnishments are the result of a court injunction. These laws have amendments and clauses therein to protect the average consumer from being left completely destitute and financial destruction. The Consumer Credit Protection Act, Title III, expressly limits the amount of income that is subject to federal withholding and prohibits an employer from taking adverse action against an employee for having a wage garnishment.
The only income that is subjected to garnishment is the after-tax income, they do not garnish the income based upon the gross earnings. Taxable income would include, state, local, and federal taxes, as well as any deductions made for health insurance, union dues, 401K or retirement deductions, previous wage garnishments, child support, social security, savings bonds or charity deductions. Also any type of income being withheld for the purpose of an employee loan are also exempt according to federal wage garnishment laws.
Federal wage garnishment laws require that a only a certain amount of income may be withheld in a certain pay period. The figures set up are as follows: twenty-five percent of the employees after tax income or the amount by which the after tax income is thirty times more than the federal minimum wage, and minimum wage standards vary state by state, the weekly garnishment amount cannot go over these two figures. This figure is based upon a person who receives a weekly pay check, however, if you are paid bi-weekly or monthly, then the wage garnishment will be recalculated and the amounts reflected based upon that information.
As with any federal wage garnishment laws, there are exceptions as to what income is taxable or not and you have rights to contest withholding of certain types of income. This income is as follows but not limited to the following: child support, veterans pay, government pension payments, unemployment benefits, public aid, funds in a community or joint account shared with others including a spouse, and various other types of income provided to you by the state. In order to protect this income from garnishment actions you will need to consult with a tax professional and have them file a document with the courts within 28 days of receiving your garnishment notice.
You may be able to avoid legal action being taken by contacting the IRS and working with them to come to some type of agreement, thus avoiding wage garnishments or bank levies altogether. Certain taxpayer actions may extent the statute of limitations and allow the IRS more time to collect. You must be aware the IRS will continue to seek withholdings until the debt is paid in full. There is no laws around that are going to protect you if you run and try to hide from the IRS, so it's best to face it head on and be prepared.
If you find yourself facing with an IRS wage garnishment and are confused about federal wage.
IRS Tax Attorney
The only income that is subjected to garnishment is the after-tax income, they do not garnish the income based upon the gross earnings. Taxable income would include, state, local, and federal taxes, as well as any deductions made for health insurance, union dues, 401K or retirement deductions, previous wage garnishments, child support, social security, savings bonds or charity deductions. Also any type of income being withheld for the purpose of an employee loan are also exempt according to federal wage garnishment laws.
How much money can they take from me?
Federal wage garnishment laws require that a only a certain amount of income may be withheld in a certain pay period. The figures set up are as follows: twenty-five percent of the employees after tax income or the amount by which the after tax income is thirty times more than the federal minimum wage, and minimum wage standards vary state by state, the weekly garnishment amount cannot go over these two figures. This figure is based upon a person who receives a weekly pay check, however, if you are paid bi-weekly or monthly, then the wage garnishment will be recalculated and the amounts reflected based upon that information.
As with any federal wage garnishment laws, there are exceptions as to what income is taxable or not and you have rights to contest withholding of certain types of income. This income is as follows but not limited to the following: child support, veterans pay, government pension payments, unemployment benefits, public aid, funds in a community or joint account shared with others including a spouse, and various other types of income provided to you by the state. In order to protect this income from garnishment actions you will need to consult with a tax professional and have them file a document with the courts within 28 days of receiving your garnishment notice.
You may be able to avoid legal action being taken by contacting the IRS and working with them to come to some type of agreement, thus avoiding wage garnishments or bank levies altogether. Certain taxpayer actions may extent the statute of limitations and allow the IRS more time to collect. You must be aware the IRS will continue to seek withholdings until the debt is paid in full. There is no laws around that are going to protect you if you run and try to hide from the IRS, so it's best to face it head on and be prepared.
What to do when you are facing a IRS wage garnishment
If you find yourself facing with an IRS wage garnishment and are confused about federal wage.
IRS Tax Attorney
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