Garnishment and Tax Levy Guidelines for Payroll Professionals

Payroll departments need to understand garnishment laws and regulations to ensure that they are correctly garnishing employee pay, two payroll professionals said at the American Payroll Association’s 40th Payroll Congress on May 13.

Common garnishments include federal tax levies, student loan repayment, and creditor garnishments. Bankruptcy orders impact how employee wages are garnished.

Federal Tax Levies

Federal tax levies occur when employees fail to pay their taxes, said Larry White, APA’s payroll training director.

The Internal Revenue Service sends Form 668-W to employers to notify them of a federal tax levy, he said. The form contains six parts, and the ...