How Much Can the IRS Garnish From My Paycheck?

Do you think the IRS is going to garnish your wages but you’re not sure how much they’re going to take? The IRS can only garnish a certain portion of your wages. The exact amount varies based on your filing status and exemption, but if you don’t fill out the correct paperwork, the IRS may end up garnishing even more. 

Wondering what to expect from a wage garnishment? Curious about how much of your paycheck the IRS can take for unpaid taxes? Then, keep reading for the answers, or call us at the W Tax Group to get help today. 

What Is a Wage Garnishment? 

When the IRS garnishes your wages, it means that your employer withholds a certain portion of your wages and sends them to the IRS. Each pay period, your employer has to comply with the IRS’s demand to withhold a portion of your wages. Your employer may charge you a processing fee for handling the garnishment, but federal law prohibits your employer from firing you for a wage garnishment. 

How do I find out if the IRS is going to garnish my paycheck?

Before the IRS garnishes your wages, you will receive several notices. First, the IRS will inform you that you have an outstanding balance that must be paid before the deadline. The IRS may send several notices regarding your balance, and then, the agency will escalate to notice CP504.

IRS Notice CP504 states that the IRS intends to levy your assets and garnish your wages if you do not pay. This tends to be the most common notice the agency sends about wage garnishments, but the IRS uses other notices as well. The final notice will generally give you 30 days to respond before the wage garnishment moves forward. 

If you don’t respond by the deadline on the notice, the IRS will send a letter to your employer. The letter will explain when to start the garnishment (usually the next pay period) and how to calculate how much to garnish.

Does the IRS need a court order to garnish my wages?

Creditors that are not a part of the IRS must file a lawsuit to garnish your wages. They cannot take action until they get a court order. However, if the IRS is garnishing your wages, they do not need a lawsuit or court order. This fact allows an IRS wage garnishment to move faster than other garnishments. 

How Much Can the IRS Garnish? 

The IRS can take everything over the exempt amount. The exempt amount is based on your filing status and the number of dependents you have. It may also include other exemptions such as court-ordered child support that you’re paying. 

How does the IRS calculate the wage garnishment?

The amount of the wage garnishment varies based on your personal situation. The IRS will send Form 668-W and Publication 1494 to your employer. Your employer will give you those forms, and you have three days to complete them. 

Make sure to complete them carefully because your employer will use this information to calculate your garnishment. If you don’t return the forms within three days, your employer will calculate the garnishment as if you are single with no dependents. In other words, they will take as much as possible from your paycheck. 

Exempt amount based on filing status

As of 2023, the IRS lets you keep the following amounts per week based on your filing status. Any earnings above this amount will be garnished and sent to the IRS.

• Single or married filing separately $266.35
• Head of household $400
• Married filing jointly and qualifying widower $532.69

You also get to keep $90.38 per week for each dependent. For example, if you file as head of household and have two dependents, your exempt amount is $400 plus $90.38 times two. That means you get to keep $580.76 per week, and the remaining amount gets garnished. 

Again if you don’t return the garnishment forms to your employer, they will calculate the garnishment based on a single filer with no dependents. As of 2023, that means you get to keep $53.27 per day, $266.35 per week, or $1154.17 per month. 

Exemptions for child support

Wage garnishments for child support take priority over any other garnishments. If you’re paying court-ordered child support, that amount is also exempt. If your child support is already being withheld from your paycheck, your employer will take that amount into account when calculating the garnishment. If you pay your child support out of your take-home pay, you should be able to note your child support payments when you complete the paperwork for your garnishment. 

Note that you cannot claim an exemption for a dependent if you’re also claiming an exemption for their child support. To give you an example, imagine that you have three children. You share custody of one child with your former partner and you pay them child support for that child. You share your other two children with your current spouse, and you all live together. In this case, you note the child support payments, but you only claim two dependents when figuring out your exemptions. 

If you forgot to note your child support on your paperwork and the garnishment has already started, contact the IRS directly for help. 

Which wages can be garnished?

Wage garnishment includes hourly wages, commissions, and bonuses. Once your employer pays you the exempt amount, the IRS can garnish everything else. 

The IRS can take 100% of your earnings over the exempt amount. This includes holiday bonuses and commissions. To explain, imagine that your employer pays you the exempt amount and sends the rest to the IRS. That same pay period, your employer issues a bonus, but because you’ve already received the exempt amount, they send 100% of the bonus to the IRS. If you’re retired and receive Social Security, the IRS may be able to garnish those payments as well. In some cases, the agency can also garnish Social Security survivor’s or disability payments as well.

Can the IRS Garnish Your Wages for Other Debts?

In addition to garnishing your wages for tax debts, the IRS can also garnish your wages for unpaid student loans. 

Additionally, the agency can seize your tax refund for unpaid child support. If this happens, the IRS will take the refund and send it to the state agency that collects child support. However, the IRS won’t garnish your wages for unpaid child support. Rather, the state agency that deals with child support will initiate the garnishment if applicable. 

How to stop an IRS wage garnishment

Generally, with an IRS garnishment, wages will continue to be withheld until 

• The amount owed is paid in full. 
• Arrangments are made for the tax debt to be paid in time (ie monthly payments), and the terms of the payment agreement stipulate that the garnishment must end.
• The garnishment is released. 

You may be able to get the garnishment released if you can prove that it was issued in error or that it is causing extreme financial hardship. To get help stopping a wage garnishment, contact a tax attorney as soon as possible. 

How Can I Pay My Taxes Owed? 

Keep in mind that it’s much easier to prevent a wage garnishment than to remove one. If possible, contact the IRS to make arrangements for your tax debt before the agency starts garnishing your wages. However, if your wages are already being garnished, the IRS may agree to stop the garnishment if you set up payment arrangements. Here are the main options: 

• Installment Agreement — Make monthly payments until you pay off the tax debt in full. Note that if you owe over $50,000, the IRS may issue a federal tax lien until you complete your payment plan. 
• Partial Payment Installment Agreement — Pay as much as you can per month, and when you reach the Collection Statute Expiration Date (CSED), the IRS writes off the remaining balance.
• Currently Not Collectible Status — If your financial situation does not allow you to pay any of your balance, request Currently Not Collectible Status. If you’re approved, the IRS will not garnish your wages or take other collection actions, unless your financial situation improves. 
• Offer In Compromise — If you qualify, an OIC lets you pay off your tax bill for less than you owe. In all cases, you must pay the offer within two years of acceptance, but if you can pay within five months, you will generally get a slightly lower payoff amount. 

In addition to considering the above options, you should look into penalty relief. The penalties on unpaid balances can get very high, and if the IRS agrees to abate your penalties, you can reduce your balance substantially. 

Get Help With Wage Garnishments

A wage garnishment can ruin your finances. As explained above, the IRS only allows you to keep a very small portion of your paycheck based on your filing status and dependents, and for most people, the exempt amount is much less than they need to live on. 

Don’t go broke paying an IRS wage garnishment. Instead, contact a tax attorney for help today. At the W Tax Group, our experienced tax resolution specialists can help you deal with IRS or state wage garnishments. Whether you’re worried about a garnishment or already dealing with one, we can help. To learn more, contact us today.