Filing Status and Exemptions
- The IRS does not take a specific percentage of your wages when you're garnished, but rather allows you to have a fixed amount of your paycheck. The amount that is exempt from levy is based on your filing status, number of exemptions claimed and the frequency of your pay. Your employer must use an IRS table to calculate the amount of pay you'll receive (see Resources). For example, if you're paid biweekly; your filing status is single; and you claim four exemptions, your paycheck is $792.31. In this scenario, if all factors are the same except your filing status is head of household, your paycheck is $896.15. This is true regardless of your actual pay before the garnishment is considered, unless your pay does not regularly equal the amount of exemption. If this is the case, you should receive your entire paycheck.
- IRS wage levies are continuous. This means that after a wage levy is sent to your employer, each paycheck you're issued is subject to garnishment until your tax debt is fully satisfied; however, the levy does not follow you to different employers if you change jobs. The IRS has to locate your new employer and serve a new levy if you become separated from your current employer.
Changing Your Exemptions
- When you receive notice of the levy on your wages, your employer should give you a Statement of Exemptions. The payroll department for your employer will use the information you provide on the statement to determine how much of your pay is exempt from levy. If you do not receive the statement from your employer and would like to change your exemptions, you can also complete and sign a new IRS W-4 form (see Resources). This is the exemption form you fill out when you are first hired and provides the same information regarding your filing status and number of exemptions.
Getting a Wage Levy Released
- You can get a wage levy released by contacting the IRS and requesting an alternate method to pay your debt, such as a payment plan. In most cases, the IRS will accept your request to make monthly installment payments in lieu of a wage levy. Once your installment agreement is approved, the IRS will send a release of garnishment to your employer. For a faster release, have the name and fax number of the person who processes payroll for your employer. The IRS can fax the release directly to him instead of sending the paperwork via regular mail.