(K) Section 9 Other Deductions from pay

Question 1

What are tax levies

Answer 1

individuals who fail to pay their taxes may become subject to federal or state tax levy after other collection efforts have been exhausted

Question 2

When must tax levies be satisfied?

Answer 2

Before all other garnishments or attachment orders, except child support withholding orders in effect before the date of the levy.

Question 3

What are employer’s responsibilities for tax levys?

Answer 3

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.

Question 4

What is the name of the from sent to employers to start withholding tax levys?

Answer 4

668-W

Question 5

What for is sent to employers to release tax levy?

Answer 5

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

Question 6

Enforcement of child support orders is a joint ____/____ responsibility, with federal laws providing standards state laws must meet or exceed.

Answer 6

federal/state

Question 7

What is CCPA?

Answer 7

Consumer credit protection act

Question 8

What are consumer protection act (CCPA) basic provisions/requirements?

Answer 8

• 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.

Question 9

What is disposable earnings?

Answer 9

Disposable earnings is the amount of earnings left after legally required deductions (taxes and mandated payments for state employee retirement systems) have been made.

Question 10

Under CCPA what is the maximum amount to withhold from an employee’s wages for child support?

Answer 10

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.

Question 11

What is medical child support orders?

Answer 11

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)

Question 12

What is a creditor garnishment?

Answer 12

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.

Question 13

What is the limit that can be garnished for creditor garnishments?

Answer 13

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).

Question 14

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.

Answer 14

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.

Question 15

What is the maximum amount to be withheld for student loan collections?

Answer 15

15 % of disposable earnings

Question 16

What is the Debt collection improvement Act of 1996

Answer 16

Garnishments for non tax related debt.

15% of disposable earnings.

ex: Small Business Loan

Question 17

The fair labor standard act (FLSA), places restrictions on garnishments When??____

Answer 17

They bring employee’s wages below the minimum wage and overtime pay guaranteed by the Act.

Question 18

List other deductions by priority

Answer 18

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

Question 19

What are wage assignments?

Answer 19

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

Question 20

Union dues are deducted when?

Answer 20

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.

Question 21

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.

Answer 21

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.