2 SpeakerRosemarie Fraumeni, CPP Manager, Payroll American Dental Partners, Inc.
3 Rosemarie Fraumeni, CPP Certified Payroll Professional since 2000BS in AccountingInvolved in payroll since 1991Member of APA’sNational Speakers BureauCertification Advisory Board – CPP CommitteeGovernment Affairs Task ForceMember of the APA Boston Local ChapterCurrent Vice PresidentMember of the New England Payroll Conference CommitteeCurrent Conference Chair and TreasurerAPA Awards2010 Payroll Woman of the YearSpecial Recognition 2008Meritorious Service 2005
4 Please Complete Your Evaluation at the End of the Workshop AgendaInvoluntary deductionsFederal tax levyState tax levyStudent loanCreditor garnishmentBankruptcyPlease Complete Your Evaluation at the End of the Workshop
13 IRS Tax FactsA delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return.In 2010, the Internal Revenue Service had over 3.6 million delinquency investigations.(Information obtained from IRS web site)
14 Why are you getting a levy? A levy is the result of the delinquency of an employee to pay owed tax liabilities
17 Form 668-W, Part 3I certify that I can claim the people named below as personal exemptions on my income tax return and that none are claimed on another Notice of Levy. No one I have listed is my minor child to whom (as required by court or administrative order) I make support payments that are already exempt from levy. I understand the information I have provided may be verified by the Internal Revenue Service. Under penalties of perjury, I declare that this statement of exemptions and filing status is true.
19 The federal tax levy“What is the priority of the federal tax levy as compared with other attachments?”
20 The federal tax levy Payments exempt from the levy Unemployment benefitsWorkers’ compensation paymentsCertain pension and annuity paymentsCertain disability and welfare paymentsPre-existing involuntary deductions
61 AMOUNT SUBJECT TO GARNISHMENT Maximum DeductionAMOUNT SUBJECT TO GARNISHMENTWeeklyDisposable earnings are $ or less: NONEDisposable earnings are more than $ but less than $290.00: AMOUNT ABOVE $217.50Disposable earnings are $ or more: MAXIMUM 25%
63 State Rules ST Disposable earnings Garnishment limits Administrative FeeALThat part of the earnings of a debtor remaining after deduction of amounts required by law to be withheld. Does not include periodic payments pursuant to a pension, retirement, or disability program.75% of weekly disposable earnings exempt from withholding.No provision.
64 State Rules ST Disposable earnings Garnishment limits Administrative FeeAZThat remaining portion of a debtor’s wages, salary or compensation for personal services, including bonuses, commissions, payments pursuant to a pension or retirement program or deferred compensation plan, after deducting from such earnings those amounts required by law to be withheld.CCPA limits. However, court may determine at a hearing that judgment debtor or his family would suffer extreme economic hardship as a result of the garnishment and reduce the amount of nonexempt earnings withheld under a continuing lien ordered from 25% to not less than 15%.$5 per pay period, deducted from nonexempt earnings of judgment debtor. If there is not enough income to collect the fee and it remains owed when the writ becomes invalid or is released, the uncollected fee is chargeable against the creditor, not the judgment debtor.
65 State Rules ST Disposable earnings Garnishment limits Administrative FeeAKThe following will be treated as earnings: (1) Disability, illness, or unemployment; (2) alimony; (3) insurance proceeds; (4) amounts paid under a stock bonus, pension, profit-sharing, annuity or similar plan providing benefits.Net earnings of an individual are determined by subtracting from the gross earnings all sums required by law or court order to be withheld.$350 or $550, if individual’s earnings alone support household.Student loans: $5 per payment, deducted from other wages or salary owed to the borrower.
66 State Rules ST Disposable earnings Garnishment limits Administrative FeeCA“Earnings” means compensation payable for personal services performed, whether denominated as wages, salary, commission, bonus, or otherwise.CCPA limits. However, portion of debtor’s earnings which is necessary for the support of the judgment debtor or family is exempt from levy. This does not apply if: (1) debt was incurred for common necessaries of life or incurred for personal services rendered for employer; (2) order is a withholding order for support or a state tax order.$1.50 per payment, deducted from employee’s earnings.
67 State Rules ST Disposable earnings Garnishment limits Administrative FeeSCNo provision.Earnings of a debtor for personal services may not be garnished by creditors.
68 State Rules ST Disposable earnings Garnishment limits Administrative FeePAFor purposes of amounts owed to creditor-landlord…, “net wages” means all wages paid less only the following items: federal, state and local income taxes; FICA payments and nonvoluntary retirement payments; union dues’ and health insurance premiums.Generally, wages salaries and commissions of employees are exempt from garnishment while in the hands of the employer…No provision.
69 State Rules ST Disposable earnings Garnishment limits Administrative FeeTXNo provision.State constitution prohibits current wages for personal service to be subject to garnishment, except for the enforcement of court ordered: (1) child support payments or (2) spousal maintenance.No general provision
70 Multiple Garnishments Federal garnishment maximum applies no matter how many garnishments are received
71 Areas of state regulation The priority of multiple garnishments
72 ExceptionsWages subject to withholding for child support, tax levies, or bankruptcy orders are not considered deductions required by law
73 ExceptionsWithholding for child support, tax levies, or bankruptcy orders are not to be subtracted from gross earnings
74 Areas of state regulation Time limits for remitting withheld amounts
75 Areas of state regulation Whether the employer can charge an administrative fee for processing the garnishment
76 Areas of state regulation The procedure to follow when an out-of-state garnishment order is received
77 DischargeEmployers are prohibited by the CCPA from terminating an employee because of the employee’s one indebtedness