IRS Wage Garnishments For Back Taxes

What to Expect When the IRS Garnishes Wages for Unpaid Taxes

If you don't pay your federal taxes, the IRS can contact your employer and have them garnish your wages. A garnishment is when your employer takes money out of your paycheck and sends it to the IRS. Garnishments can be extremely embarrassing, financially devastating, and professionally damaging.

Federal law prohibits employers from firing you for a single garnishment, but state laws vary on whether or not you can be dismissed for multiple garnishments—for example, a garnishment for unpaid taxes and a garnishment from a private creditor or for unpaid child support. 

To help you learn more about your options and what to expect, the following sections provide a high-level overview of IRS wage garnishment with links to more detailed resources.

Table of Contents

• What is wage garnishment? 
• When will the IRS garnish your wages?
• Form 668-W - Notice of Levy on Wages
• How much can the IRS garnish from Paycheck?
• Stopping a wage garnishment
• Getting help from a tax pro
• Frequently asked questions about wage garnishments

What Is a Wage Garnishment?

A wage garnishment is when the IRS instructs your employer to withhold money from your paycheck and send it to the IRS for unpaid taxes. The IRS uses wage garnishments to collect taxes from people who do not pay them voluntarily. The agency must give you at least 30 days' notice before starting a wage garnishment or any other type of asset seizure.

Wage garnishments specifically refer to situations where the IRS takes your wages, salaries, commissions, and other earned income. But the agency can also seize other payments including certain pension payments, Social Security payments, and money received from third parties such as rent from your investment properties.

When Will the IRS Garnish Wages?

The IRS will only garnish your wages if you do nothing to resolve your unpaid taxes. If you set up a payment plan or make other arrangements with the IRS for your tax debt, the agency will not garnish your wages. Before garnishing your wages, the IRS will send you a Final Notice of Intent to Levy that also notifies you of your right to a hearing. 

At that point, you have 30 days before the IRS can move forward with a wage garnishment, a bank levy, or another type of asset seizure. If you don't take action, the IRS can send your employer a notice of garnishment, and once that happens, it will be very difficult to stop the garnishment. 

Note that you may receive other intent-to-levy notices that do not talk about your right to an appeal hearing. These notices generally mean the IRS is going to seize your state tax refund. The IRS cannot garnish your wages until they notify you of your right to a hearing. 

Form 668-W - Notice of Levy on Wages, Salaries, Etc.

The IRS uses Form 668-W to alert your employer about the wage garnishment. Your employer must comply with these demands, or they will incur penalties and may become personally liable for the tax. When your employer receives this form, they will let you know about the garnishment and give you some paperwork to complete. 

Make sure that you get the forms back within three business days. They determine how much your employer should withhold from your paycheck, and if you don't fill them out, your employer will have to withhold the highest amount possible. To prevent your boss from getting this form, contact the IRS when you get the intent to levy notice, and set up a payment plan or talk about other options on your balance due. 

How Much Can the IRS Garnish?

The IRS can garnish all of your wages over an exempt amount based on your filing status and number of dependents. Publication 1494 shows how much of your take home pay must be left after the garnishment, and unfortunately, it's not a lot. As of 2024, if you file as married filing jointly with two dependents, your exempt amount is $753.84 per week. If you're single with no dependents, your exempt amount is only $280.77 per week.

When determining how much of your wages to garnish, your employer will consider legally required withholdings including state and federal income tax, Social Security, and Medicare, but they will not consider voluntary withholdings such as most contributions to retirement accounts. 

In other words, your employer will determine your take-home pay after your required withholdings, and then, they will send everything over the exempt amount to the IRS. If you have any withholdings that are not legally required, they will come out of the exempt amount.

How to Stop a Wage Garnishment

Stopping a wage garnishment when it's already in place can be very difficult, and you may want to have a tax attorney help you. Start by contacting the IRS and explaining that the garnishment is causing financial hardship. If possible, get your account marked as currently not collectible and ask the IRS to remove the garnishment. If you cannot get results by working directly with the IRS, contact the Taxpayer Advocate Service by filing Form 911. 

Whenever possible, you should try to avoid a garnishment rather than stopping it. When you receive the Final Notice of Intent to Levy With Your Right to a Hearing, contact the IRS before the deadline on the notice and set up payments. Don't be intimidated by the word hearing—it's usually just a phone call between you, the IRS, and your tax pro if desired. Follow the instructions on the notice to request a hearing, and then, use that time to ask about payment plans, offers in compromise, or other resolution options.

How a Tax Pro Can Help With Wage Garnishments

A tax pro can help you with every stage of this process, and in most cases, paying for their services helps you save money or gain peace of mind in the long run. A tax pro can help you respond to levy notices so that you avoid a garnishment, and if the garnishment is already in place, they can help you remove it. 

They will talk with you about your options, make sure your rights are protected, and deal with the IRS for you. You can hire an enrolled agent (EA), tax attorney, or certified public accountant (CPA) to represent you in front of the IRS, but to ensure you get the best results possible, you should hire a tax pro who has experience dealing with wage garnishments. When you use TaxCure to search for pros, you can filter the results to look for that particular type of experience.

Frequently Asked Questions 

This resource answers some of the most common questions people have about wage garnishments for unpaid taxes. For instance, a lot of people want to know, how long do wage garnishments last? The answer - until the tax debt is paid in full or you convince the IRS to release the garnishment. 

Here's another common question, how much can the IRS garnish? Everything over the exempt amount, including all bonuses. If you have two jobs and the first one covers the exempt amount, the IRS can take all of the wages from your second job.

If you don't see your question answered or if you want help dealing with a wage garnishment, use TaxCure to get help now. TaxCure has a directory of tax pros who focus specifically on resolving tax problems—tax resolution is a niche part of the tax industry, and it's important to realize that not all tax pros offer these services. 

There are big nationwide firms that offer tax resolution services, but unfortunately, these companies are stacked with big sales teams that are more focused on profits than actually helping people. In most cases, you are significantly better off hiring a local tax pro than working with a tax relief company.

Don't let the IRS take your wages. Use TaxCure to search for an experienced local tax professional today.