State Garnishments

Countless Americans know that they have tax debt. But for many, the problem doesn’t become real until they receive a copy of a wage garnishment notice from the state that has also been sent to their employer. You are probably wondering what the notice means, why it was sent to you, and how you can take care of it. Let’s take a look.

WHAT IS A STATE WAGE GARNISHMENT?

Wage garnishments are another way that the Taxing Authorities will go after individual taxpayers for back taxes. This method allows the Taxing Authorities to take a substantial amount of money out of your paycheck, making paying your bills extremely difficult.

There are a few things you should know about state garnishments so that you can either stop them from happening or deal with them once they happen.

  • First, it’s important to know that the Taxing Authorities are supposed to adhere to a set of administrative procedures before actually issuing a levy on your wages. This typically entails a series of notices that advise you of your standing with the Taxing Authorities and what you can do about your situation.
    • If you didn’t know that you owed taxes until you showed up to work one day with a note from HR about the wage garnishment, you should be questioning the appropriateness of the levy.
  • Second, if the Taxing Authorities have notified you of your rights and finally issued a wage garnishment, know that this can go on until the debt is paid in full. This means that it’s not just a one-paycheck deal. The garnishment could go on for years if not addressed properly.
  • Third, once the Taxing Authorities have issued a wage garnishment, they may also issue a levy to your bank account, if they haven’t already done so. It’s best to check your accounts to see if the Authorities have issued a bank levy.
  • Fourth, even though the wage garnishment is ongoing, it is not a substitute for a formalized resolution, such as an Installment Agreement. Wage garnishments are based on how much of your income you can live on. However, the amount of your paycheck you will be left with after a wage garnishment is typically the bare minimum required to survive.

HOW CAN YOU FIX THIS?

The reality is that the Taxing Authorities would rather resolve your tax issues prior to a wage garnishment being issued. However, once a proper resolution is in place, the garnishment can be removed. The best thing you can do is develop a plan to resolve the debt. Whether you are stopping a wage garnishment from going into effect or removing a current wage garnishment, you will need to consider your options.

Let 20/20 Tax Resolution be your resource for handling your situation. Remember, you can talk to one of our tax professionals at any step along the way.