How to Stop a Tax Wage Garnishment in Illinois

No one wants to experience wage garnishment in Illinois — or in any state, for that matter. Having your wages garnished due to unpaid taxes results in smaller paychecks and can cause feelings of shame for some people, but wage garnishment is fairly common. 

One study shows that nearly 1% of workers in the U.S. have their wages garnished at any given time. That might not sound like a lot, but that means that if a company employs 100 workers, there is a good chance that at least one employee is experiencing wage garnishment. 

Your wages can be garnished for private debts if the creditor gets a judgment against you, but if you owe a tax debt, the Illinois Department of Revenue doesn't have to get a judgment. The IL DOR can initiate a garnishment without legal action. It just has to send you the required notices. 

Worried about a wage garnishment? Wondering what to expect? Here's an overview of how garnishments work when you owe a tax debt in Illinois. 

Wage Garnishment in Illinois

If you fail to pay your tax bill on time to the Illinois Department of Revenue, the state will begin collection efforts similar to the IRS. Some of these collection efforts can cause panic, which is understandable given how severely the collection efforts can impact your life. The Illinois Department of Revenue can seize your assets (such as vehicles and real estate), revoke your business license, and garnish your wages. 

Illinois Garnishment Law

In Illinois, wage garnishments can begin just 10 days after the state notifies you about the garnishment. While this does not give you much time to prepare for reduced paychecks, Illinois will have already notified you of your unpaid tax bill. Reviewing your bill and seeking help from a qualified Illinois CPA (if necessary) as soon as possible will reduce the chances of a wage garnishment letter showing up in your mailbox. 

What Illinois Can Garnish from Your Paycheck

In Illinois, wage garnishment is not limited to your hourly wage -or salary. If you have unpaid taxes, the state can garnish your bonuses and commissions, too. So, that end-of-year or holiday bonus is fair game. That big commission you got from your sales job can be garnished to. 

And the state can continue garnishing these types of wages until your unpaid Illinois taxes plus interest and penalties are paid in full.

How much of my wages can be garnished in Illinois? 

You can have up to 15% of your gross wages garnished in Illinois. This means that Illinois can garnish 15% of your salary before taxes and benefits (like health insurance premiums) are subtracted. 

For example, you might gross $1,200 weekly but only take home weekly paychecks of $900 by the time taxes, health insurance premiums, and other benefits are deducted. 

• The Illinois garnishment laws dictate that the state can garnish up to 15% of the $1,200 rather than 15% of the $900. 
• That comes out to an additional $180 subtracted from your paycheck every week. 

The exact dollar amount for wage garnishment in Illinois can vary from person to person. Garnishment amounts depend on your individual salary and what percentage the state garnishes. Just because the state can garnish up to 15% does not mean that it garnishes this much from every worker with an unpaid tax bill.

How to Prevent Illinois Wage Garnishment

The best way to prevent wage garnishment in Illinois is to pay your tax bill by the due date. So, while it may feel tempting to push those bills aside, it is not in your best interest. Illinois will send you a detailed bill for the amount you owe and will provide an explanation for why you owe that amount. 

If you have any questions about your Illinois tax bill, it is best to contact the Department of Revenue as soon as possible. When you cannot resolve your tax problems or come to an agreement with the state, you may choose to consult with a professional.

Stop Wage Garnishment in Illinois

Wondering how to stop a wage garnishment in Illinois? Thankfully, you have options. You may not need to have your wages garnished at all. Here are some options that can help you stop or avoid a wage garnishment for state back taxes. 

Illinois offer in Compromise: An offer in compromise (OIC) can help you settle your tax debt for less than you owe. The IRS and the state of Illinois provide these agreements to qualified taxpayers. When deciding whether or not to approve an offer in compromise, the agencies will consider the likelihood of collecting the original debt in full. 

• For example, if you do not make enough money to pay the debt in full before it expires, the agencies might agree to accept a lesser amount.
• Additionally, if you don't have any assets that you could sell or borrow against to pay the debt, you will be more likely to qualify.

Bankruptcy: Filing bankruptcy may not help everyone erase unpaid tax bills, especially more current tax liabilities. You can only discharge certain tax debts in bankruptcy, and usually, they must be a few years old. Generally, however, when you file, the courts issue a stay that temporarily stops collection actions, including garnishments. 

Keep in mind that if someone files for bankruptcy, they can see their credit score drop significantly. This can make it much more difficult to achieve certain the following goals.

• Taking out a loan 
• Renting an apartment 
• Getting a new job

Discussing your individual situation with an Illinois tax attorney can help you determine whether filing bankruptcy can stop Illinois wage garnishment in your situation.

Payment plan: The IL DOR lets qualifying taxpayers make monthly payments on their tax debt. By the time a garnishment is in place, it may be too late to set up a payment plan, but it depends on the situation. When you contact an IL tax pro, they can talk with you about whether or not a payment plan is an option in your situation. 

Get Help With Wage Garnishment in Illinois

If you have tax debt and need to know how to stop a wage garnishment in Illinois, your best bet is to consult with an Illinois tax professional. Professionals who specialize in Illinois wage garnishment can assess your individual circumstances and guide you through whichever process best suits your needs. 

Using TaxCure, you can find a qualified Illinois CPA, tax attorney, or enrolled agent (EA). You can also narrow your search to find professionals with experience with the Illinois Department of Revenue and wage garnishment in Illinois. To start a search, simply select “Find a Local Tax Pro” in the top left of the website and select Illinois DOR, enter your zip code, and select “Wage Garnishment” to find the tax professionals in your area that have experience helping with this exact type of situation.