How to Stop Wage Garnishments for Unpaid Taxes in South Carolina
If you don't pay state taxes, the South Carolina Department of Revenue (SCDOR) can attempt to take the money without your cooperation. The state can issue tax liens that attach to all of your assets. The DOR can also seize your bank or investment accounts. In most cases, however, the state starts involuntary collections by garnishing your wages.
The SCDOR can garnish 25% of your gross wages if you don't pay your state taxes. For example, if you earn $1,000 per week before taxes and other deductions, the DOR can take $250. The Department can also garnish your wages for unpaid hospital bills or state ethics commission penalties.
What to Expect With a Wage Garnishment
If you don't pay your SC taxes, the SCDOR will send you multiple notices about the tax debt, interest, and penalties. If you continue to ignore the debt, the DOR may decide to garnish your wages. The state will send a notice to your last address on file, and they will also send a notice to your employer.
At that point, your employer will start to withhold payments from your paychecks, and they will send the payments to the state. The DOR will also seize state and IRS tax refunds and apply them to your debt. This will continue until you pay the tax debt in full.
Your boss cannot fire you for having a wage garnishment, but having your wages garnished is professionally embarrassing. If you leave your job, the DOR will send a garnishment notice to your new employer once you get one.
What If You Disagree With the Garnishment Notice
If you disagree because you already paid the tax in full, find proof of your payment and contact the DOR immediately. If you disagree with the tax due for another reason, you may be able to appeal. File a protest as soon as possible or by the deadline shown on the notice. Then, work your way through the state's appeals process.
Note that you cannot appeal taxes on frivious grounds, such as arguing that the state doesn't have a right to tax citizens. You must have a valid argument. If you are unable to deal with the DOR through regular channels, contact a tax pro for help or reach out to the SCDOR Taxpayer Advocate.
How to Avoid Wage Garnishment
To ensure the SCDOR doesn't garnish your wages, take care of your tax debt as soon as possible. You can pay your SC taxes in full online, through the mail, or over the phone. If you cannot afford to pay in full, consider applying for a payment plan, or look into SC's offer in compromise program.
What If You Receive a Garnishment Order for Your Employee
If the SCDOR alerts you about a wage garnishment for one of your employees, you must respond. If you don't garnish your employee's wages as instructed, you may become personally liable for the debt. The levy notice should contain instructions about how to calculate the wage garnishment.
To make a payment, go to MyDORWAY. You need the Letter ID from the Levy Notice and the last four numbers of your employee's social security number. You can also use MyDORWAY to respond to a levy notice and to alert the DOR if your employee is no longer working for you or is on a leave of absence.
How to Reduce Your Wage Garnishment in South Carolina
Once a wage garnishment is in place, you can generally only remove it by paying your tax debt in full. However, you can ask the SCDOR to reduce the percentage of your wages being garnished. Normally, wage garnishments apply to 25% of your gross wages, but you can request a reduction to 15%.
To apply, make the request on the MyDORWAY homepage or email the DOR at [email protected]. You need to write a letter about why the garnishment is causing financial hardship. You should also include a copy of your pay stub, a list of monthly expenses, bank statements from the last two months, and contact info for your payroll department.
How to Make a Payment If Your Wages Are Being Garnished
If your wages are being garnished, you can make a payment by credit card. Email the DOR with a copy of the payment receipt and your payroll department's contact info. Then, the DOR will ensure that the payment gets reflected on your account and that your employer adjusts the garnishment as relevant.
What If I pay in full?
Once the SCDOR processes your payment, they will notify your employer to stop the garnishment. This process usually takes about 30 days. If you mail a check, processing can take up to four weeks. Credit card payments take one to two weeks to process.
What if the garnishment doesn't stop after I pay in full?
If you've paid in full but your employer is still garnishing your wages, send a copy of your last pay stub plus the contact details for your payroll department to the DOR. As of 2024, you should email [email protected].
What if my employer garnishes too much from my paycheck?
If your employer garnishes your pay after you have paid your tax debt in full, the SCDOR will send you a refund. Sometimes, this can happen if your employer doesn't receive the satisfaction letter until after they have processed payroll.
Other Consequences of Unpaid State Taxes
In addition to garnishing your wages, the SCDOR may seize your tax refunds. The DOR may also issue a tax lien and/or seize your other assets. The state may levy bank accounts, investment accounts, and contract or future payments. For example, if someone owes you rent, the DOR may levy that, or if you process credit card payments for your business, the state may be able to seize those funds before they hit your bank account.
The SCDOR can also revoke your business license. If this happens, the state typically sends you a notice and gives you 90 days to respond. If you don't contact the DOR or make payment arrangements, the state can shut down your business, and if you continue to operate, you can face penalties of $500 per day.
Get Help With SC Wage Garnishments
Are you facing a wage garnishment? Are you having other trouble with personal or business taxes in South Carolina? Then, you need help from a tax pro who's experienced in this state.
Don't call the big tax relief firms. Although the big companies may be the first to pop up when you do a search for the best tax relief firms, they lack state-specific experience and fill their staff with sales reps rather than experienced tax pros. Instead, use TaxCure to find a local professional who's experienced with your type of tax problem.
To get started, contact an SC tax pro today or check out the following links: