(K) Section 9 Other Deductions from pay Flashcards
What are tax levies
individuals who fail to pay their taxes may become subject to federal or state tax levy after other collection efforts have been exhausted
When must tax levies be satisfied?
Before all other garnishments or attachment orders, except child support withholding orders in effect before the date of the levy.
What are employer’s responsibilities for tax levys?
Determine the amount of the employer’s wages that is subject to the levy.
Determine if there are other claims on the employee’s wages that take priority over the levy.
What is the name of the from sent to employers to start withholding tax levys?
668-W
What for is sent to employers to release tax levy?
Form 668-D
The employer must continue to withhold and make levy payments until it receives form 668-D
The employer cannot stop withholding once the payments match the total due the IRS states on the Form 668-W
Enforcement of child support orders is a joint ____/____ responsibility, with federal laws providing standards state laws must meet or exceed.
federal/state
What is CCPA?
Consumer credit protection act
What are consumer protection act (CCPA) basic provisions/requirements?
- CCPA prohibits an employer from discharging an employee because of a garnishment for one debt
- CCPA does not protect an employee from discharge if there has been a garnishment for a second or subsequent debt.
- CCPA sets maximum amounts that can be withheld from employee’s wages
- CCPA specifies that garnishment restrictions do not apply to bankruptcy court orders and debts due for federal and state taxes. Nor do they affect voluntary wage assignments, Ie. situations where workers voluntarily agree that their employers may turn over a specified amount of their earnings to a creditor or creditors.
What is disposable earnings?
Disposable earnings is the amount of earnings left after legally required deductions (taxes and mandated payments for state employee retirement systems) have been made.
Under CCPA what is the maximum amount to withhold from an employee’s wages for child support?
50% disposable earnings, if the employee is supporting another spouse and or/family
60% disposable earnings, if not supporting another spouse and/or family
add 5% if employee is at least 12 weeks late /in arrears.
What is medical child support orders?
All state have passed laws allowing courts to require medical child support.
All employer-sponsored group health plans required to comply
Health plans cannot be forced to offer any new or different benefits
The child would be covered under the same group health plan the for which the noncustodial parent is eligible (even if the parent does not have coverage at the time)
What is a creditor garnishment?
When an employee has a debt that remains unpaid, a wage garnishment is one legal mean by which the person who is owed the money (creditor) can obtain payment
The federal CCPA places restrictions on states in which regulation of creditor garnishments, both:
- on the amount that may be garnished, and
- on the freedom to discharge an employee because the employee’s wages have been garnished.
What is the limit that can be garnished for creditor garnishments?
The lessor of 25% of disposable earnings Or
The amount by which the disposable pay for the week exceeds 30 times the federal minimum wage. (7.25 * 30 available for the employee).
True of false?
Bankruptcy orders issued under Chapter XIII of the Bankruptcy act take priority over any other claim against the employee’s wages, including federal and state tax levies before the bankruptcy order.
True..
except child support.
The only time an employer should continue to withhold for other garnishments is if the trustee specifically provides instructions to do so.
What is the maximum amount to be withheld for student loan collections?
15 % of disposable earnings
What is the Debt collection improvement Act of 1996
Garnishments for non tax related debt.
15% of disposable earnings.
ex: Small Business Loan
The fair labor standard act (FLSA), places restrictions on garnishments When??____
They bring employee’s wages below the minimum wage and overtime pay guaranteed by the Act.
List other deductions by priority
Child support Chapter XII bankruptcy orders other federal and agency garnishment federal tax levies state tax levies local tax levies creditor garnishment student loan garnishment
specific exceptions do exist
What are wage assignments?
Voluntary agreements by an employee (assignor) to have a portion of the employee’s wages assigned to a third party (assignee)
Having an agreement avoids the time and expense of court-run garnishment proceedings
Not covered by the consumer credit protection act (CCPA)
state laws govern
Union dues are deducted when?
If collective bargaining agreement does not mandate deductions employees may request the dues to be deducted
The employer must have a written, signed authorization form the employee allowing the wages to be deducted.
True or false?
taxpayers are required to substantiate any single gift of $250 or more - and any goods or services received in return for the gift - to be deductible on their taxes.
True.
The employer and charity share the reporting burden.
- a pay stub, form W2 or other document from the employer
- a document from the charitable organization with a statement that no goods or services were provided.
