IRS Wage Garnishment FAQs | Damiens Law Firm

Introduction to Wage Garnishment

Wage garnishment is a legal process in which the IRS or other creditors seize a portion of a taxpayer’s wages to collect unpaid taxes, tax debt, or other financial obligations. For many taxpayers, wage garnishment is a last resort used by the IRS after repeated attempts to address outstanding tax debt have gone unanswered. When the IRS initiates wage garnishment, it withholds a portion of your disposable income—what’s left after mandatory deductions like social security and taxes—from each paycheck. This process can create significant economic hardship, making it crucial for taxpayers to understand how wage garnishment works and what steps they can take to protect their financial situation. By addressing tax debt early and communicating with the IRS, taxpayers can often avoid the stress and financial strain that comes with wage garnishment.

Have You Received a Nasty Letter From the IRS?

If you’ve received notices in the mail that IRS wants to garnish your wages due to tax debt related to your federal tax liability, you probably have a lot of questions about why this is happening and how you can stop it. An IRS wage garnishment is a collection practice the IRS uses to notify your employer to send a portion of your earnings directly to the government as payment for your tax penalties or tax liability (back taxes).

For those who move around a lot or forget to update their address with the IRS, the first time they may even become aware of a tax bill is when their employer notifies them of the deduction from their earnings for the IRS levy. This can be an embarrassing situation at the very least, but the problem at hand can spiral out of control if action isn’t taken soon enough.

It is crucial to take steps before the garnishment begins to avoid the IRS withholding wages from your paycheck.

You can act now by becoming more aware of the basics of an IRS wage garnishment and how it can affect your life. Then, reach out to our qualified tax attorney at Damiens Law Firm, PLLC for help with challenging the IRS’ levy against you or claiming valuable income exemptions that can protect you from further financial hardship.

Can the IRS Garnish Wages?

Yes. Wage garnishment is a legal tax liability collection tool that both the IRS and private creditors can use. If you are subject to a wage garnishment for back taxes, including unpaid tax penalties or liability, the IRS or creditor will seek payment by instructing your employer to directly pay them a certain amount of your earned wages or salary.

If you have a spouse, the wage garnishment could affect both of you and cause financial hardship since it doesn’t differentiate between your take-home pay. However, if you are responsible for paying child support or alimony to someone else, that debt will be subtracted from your entire paycheck when your employer receives an official notice from the IRS.

Also, your actions to remove a wage levy will depend on whether it is the IRS or the State that is garnishing your wages. Another consideration is what portion of the liability is penalties and interest vs. income taxes.

How the IRS Garnishes Wages

When the IRS decides to garnish wages, it follows a specific process designed to give taxpayers notice and an opportunity to resolve their tax debt. The IRS typically sends a final notice of intent to levy, which informs the taxpayer that garnishment will begin if the debt is not addressed. This notice is sent to the taxpayer’s last known address and provides a 30-day window to resolve the debt, request an appeal, or make other arrangements. If no action is taken, the IRS instructs the employer to withhold a portion of the employee’s paycheck and send it directly to the IRS. The amount the IRS takes is determined by factors such as your filing status, number of dependents, and the standard deduction. Unlike other creditors, who usually need a court order to garnish wages, the IRS can proceed after sending the required notices. Employers are legally required to comply with the IRS notice, and failure to do so can result in penalties. If you receive a final notice of intent to levy, it’s important to act quickly to resolve the debt, appeal the garnishment, or negotiate a payment plan before your wages are garnished.

How much per month can IRS garnish wages?

When the IRS sends a final notice of intent to levy, indicating they want to garnish your wages, there are a few questions that are probably running through your mind. It depends on your circumstances. When the IRS garnishes your wages, the amount taken from each paycheck is determined by federal law and the total amount you owe, provided they have issued a final notice of intent to levy. We often get asked, How do I stop IRS wage garnishments, and What is the maximum amount the IRS can garnish from your paycheck? Generally, the IRS will take 25 to 50% of your disposable income. Disposable income refers to the amount remaining after all legally required deductions, such as taxes and Social Security (FICA), have been subtracted from your earnings. You should also be aware that if you’re paid as a 1099 contractor, the IRS can sometimes take the entire amount. Check out our guide on how much the IRS can garnish from your wages

There are exceptions to this rule, however, that could protect some or all of your earnings from wage garnishment. In certain cases, such as bankruptcy court orders or specific tax debts, limitations apply to how much can be garnished. Contact our tax attorney at ​Damiens Law Firm for more information about ways to stop wage garnishment.

How much do you have to owe before the IRS garnishes wages?

The IRS will first send you several notices, called bills, demanding payment. If you don’t respond to these bills or make arrangements to pay your liability, the IRS will escalate the matter by sending a notice. The amount though may vary. It would be unlikely the IRS would garnish a wage for a nominal amount of money.

Can the IRS garnish my wages if my husband owes taxes?

spouse owes back taxes, the IRS may garnish your wages to collect payment on their liability if you filed a joint tax return. If you filed individually, the IRS would not come after your wages for the balance due. But they can levy a joint bank account if your wages are deposited into this account.

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

No. While your credit card company, mortgage lender, or another private creditor would need to take you to court and get permission to garnish wages, the IRS does not. You can, however, expect to receive sufficient communication from the IRS before it begins garnishing your wages. This is delivered via mail as a final notice of intent to levy or as a threat of a federal tax lien.

You may be able to stop the IRS from withholding your wages; however, you will have to request a hearing or enter into a payment plan. Contact a tax attorney at Damiens Law Firm immediately if you would like assistance with getting an emergency hearing so we can help you get this levy released or if you would like to discuss payment plan options.

Is an IRS wage garnishment the same as a tax levy?

No. Unlike an IRS wage garnishment, a tax lien or levy freezes assets, bank accounts, or other property of yours that are over $50,000 while the government seeks payment for taxes owed. If you’re facing an IRS tax levy against your bank or assets, it’s probably too late to act on your own and expect results. In this instance, contact our tax attorney immediately to discuss your options.

If, for whatever reason, you’ve been unable to get your wage levies stopped by contacting the IRS on your own and need an experienced attorney, we can help. Contact us today to set up a free initial consultation. We will walk you through what’s happening as it happens from a tax professional.

How much of my income can the IRS take?

There is no standard percentage of what can be garnished per pay period or per week, but the IRS may be permitted to take a little more than private creditors could. The amount of money the IRS can take from your paycheck per pay period via an IRS wage garnishment is the result of a complicated calculation that determines how much of your income is exempt from wage garnishment. The non-exempt portion may be claimed entirely by the IRS. This will also depend upon your filing status (single, Married filing joint, Married Filing Separate, or Head of Household) as well as the number of dependents on your tax return.

Types of Income Subject to Garnishment

The IRS has broad authority to garnish various types of income to satisfy tax debt. In addition to regular wages and salaries, the IRS can garnish bonuses, commissions, and compensation from self-employment. Other sources of income, such as social security benefits, retirement accounts, and even funds in bank accounts, may also be subject to garnishment or levy. However, certain types of income—like child support and alimony payments—are generally exempt from IRS garnishment or have specific limitations that apply. If you are facing garnishment, you may be able to negotiate with the IRS to exclude certain income or to set up a payment plan that better fits your financial situation. Understanding which types of income are subject to garnishment can help you protect essential funds and work toward resolving your tax debt.

How do I find out if the IRS is garnishing my wages?

If the IRS is garnishing your wages, you will receive a notice in the mail advising you of the wage garnishment and how much is being taken out of each paycheck. If you have questions or need help stopping the garnishment, contact our tax attorney at Damiens Law Firm for assistance.

Are there any exemptions available?

Yes. Although it’s more difficult to provide a clear answer as to how much the IRS can garnish from your wages since it varies based on your financial and tax situation, the amount that can be claimed as exempt is a little more discrete.

The following portions of income can be claimed as exempt from wage garnishment:

• About $12,200 annually for individuals filing as singles without any dependents
• About $26,650 annually from a head of household’s income with two dependents
• About $32,700 annually from married persons jointly filing with two dependents

These values reflect exemptions for the tax year 2019 and are likely to shift year to year. Regardless, these figures can provide a rough estimate of what to expect so you can budget accordingly.

If I earn a bonus at work, will I get to keep it?

Probably not. Bonuses, commissions, fees, and other types of compensation can all be garnished from your paycheck. If your bonus is not exempt from wage garnishment, it can be claimed by the IRS in its entirety.

How often and for how long will the IRS garnish my wages?

As a continuous tax levy, you can expect the IRS to garnish your wages from every paycheck until your tax liability is satisfied or you take other actions to comply with the IRS.

Pay Period Garnishment: How Garnishments Are Calculated

The IRS calculates the amount to be garnished from each pay period based on your disposable income. Disposable income is your gross income minus necessary deductions such as social security and taxes. The IRS uses a formula that considers your filing status, number of dependents, and the standard deduction to determine how much of your income is exempt from garnishment. For example, a single taxpayer with no dependents will have a different exempt amount than a married taxpayer with two dependents. The remaining income—after accounting for these exemptions—is subject to garnishment, often up to 25% or even 50% of your disposable income, depending on your financial situation. This calculation ensures that you retain enough income to cover basic living expenses, but it can still create financial strain if a significant portion of your paycheck is withheld. If you believe the garnishment amount is too high, you may be able to request a review or negotiate a lower payment based on your current finances.

A wage levy can stop – even if you still owe taxes – if any of the following occur:

There are a few different ways to stop a wage garnishment. Check out the following:

• The IRS must stop collections if the liability is paid in full
• The IRS accepts a payment plan agreement that will whittle away at your tax liability over time
• You can prove that wage garnishment is causing financial hardship and/or economic hardship
• You file an , which is an agreement with the IRS to settle a tax liability for less than what’s really owed. You should be aware that filing an offer in compromise will suspend the statute of limitations for the IRS to collect your tax liability. This means you need to be sure you qualify; otherwise, you’re just extending the time period in which the IRS has to collect the tax liability.
• You file for bankruptcy
• You can prove in tax court that the wage garnishment against you was done in error or as a violation of the law or the IRS’ own procedures
• It’s worth noting that if you owe money and have not filed a tax return or have multiple tax returns due, these must be completed before you contact the IRS. The IRS will not offer any liability relief for tax liabilities until you have filed the past due tax return.

Exactly how will the IRS notify me of wage garnishment?

The IRS will send a series of at least three notices to your last-known address before it engages in wage garnishment.

Wage garnishment can be a scary experience for taxpayers who don’t understand the process and what to expect from an IRS wage levy. Having a tax attorney explain your options is essential, considering you only have 30 days to request an administrative hearing if you’re facing wage garnishments.

I’ve received a notice about wage garnishments. What should I do?

First, stay calm—receiving a wage garnishment notice from the IRS doesn’t always mean your wages will immediately be taken. If you get such a notice, it’s crucial to contact our tax attorney right away to start building your defense and explore your options.

In order, these notices will include:

• A demand for payment (CP14, CP501, CP503)
• A notice of intent to levy (CP504)
• A notice of your right to a hearing for due process collection (LT11/Letter 1058), which will be sent via certified mail

After you receive an LT11/Letter 1058, you can expect the IRS to begin garnishing your wages two weeks after your deadline to request a hearing has elapsed.

Do I have a chance to fight against wage garnishment?

The LT11/Letter 1058 contains details on how to request a hearing to either arrange a payment plan for your unpaid taxes or contest the IRS’s claim that you owe the debt. You must submit your hearing request within 30 days from the date on the notice. If no request is made, wage garnishment will typically begin about two weeks after this deadline.

Appealing the Garnishment

If you receive a notice that your wages will be garnished, you have the right to appeal the garnishment with the IRS. The appeal process allows you to dispute the amount of tax owed, challenge the garnishment amount, or address the timing of the garnishment. To initiate an appeal, you must file a request within the 30-day window provided in the IRS notice. During the appeal, you can present evidence of your financial situation and may be able to negotiate a payment plan or installment agreement that reduces or eliminates the need for garnishment. The IRS will review your appeal and may modify or cancel the garnishment if you demonstrate financial hardship or if errors are found in the process. Acting quickly is essential, as missing the appeal deadline can limit your options. If you’re unsure how to proceed, consulting a tax professional or attorney can help you navigate the appeal process and protect your income.

How much do you have to owe the IRS in order to go to jail?

It is unlikely that you will go to jail for owing the IRS money unless you have deliberately tried to avoid paying your taxes or have committed tax fraud. However, if you fail to file a return, fail to pay taxes owed, or commit perjury, you could be subject to criminal charges. If convicted, you could face jail time or monetary penalties.

What do I do when I start receiving these notices from the IRS?

If you receive any notices from the IRS threatening wage garnishment or a tax levy against you, consult with a tax attorney or other tax professionals as soon as possible. These professionals are uniquely qualified to handle this serious legal and financial problem. Many people don’t know how to deal with the IRS when they’re faced with a problem like this, which can make their situations more stressful and even worse.

How we can help

If, for whatever reason, you’ve been unable to get your IRS levies stopped and need an experienced attorney or tax professional, we can help. Worth noting that depending upon your situation, an attorney may be a better course of action due to the privilege of protection once there is an attorney-client relationship. Contact us today to set up a free initial consultation. We will walk you through what’s happening as it happens from a tax professional.ill walk you through what’s happening as it happens from a tax professional.

At Damiens Law Firm, PLLC, we work with clients like you who have faced tax-related wage garnishment from the IRS. No one wants to be in this position, but it can be made easier by having tax professionals in your corner, speaking to the taxing authorities, and making sure you are being fairly treated by the IRS when it seeks a tax-related wage garnishment. What is a Tax Lawyer, and what are their responsibilities? We can help you claim exemptions or review the underlying reasons why you’re facing a wage levy to ensure your interests and financial well-being can be as protected as possible in your unique situation.

If you’re interested in exploring our tax relief services and how we can help people like you, contact Damiens Law Firm, PLLC online or call (601) 476-1361.