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Wage Garnishment Exemption | Exempt From Garnished

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Wage Garnishment Exemption   |   Exempt From Garnished

 

If you owe back taxes to the IRS or State, the taxing authorities can use a wage garnishment is a to recover the money.   The IRS or State Taxing Authorities are able to garnish your wages without a court order on federal or State taxes owed.  They will first send you a written notice outlining the proposed garnishment of your wages.

Some income sources cannot be garnished to pay creditors (including IRS or State Taxing Authorities). The following are the sources of income that are not subject to collections:

  • Disability payments
  • Social Security Disability*
  • Veterans’ Federal Benefits
  • State disability benefits (ABD)
  • State welfare benefits (TANF)
  • SSI benefits above 15%
  • Coronavirus stimulus payments until September 1, 2020 at the earliest
  • Compensation for unemployment (the exception would be if you owe child support)
  • Any child support payments you receive
  • Federal student loans

*Retirement benefits and Social Security Disability Benefits can be garnished to contribute towards paying child support, federal tax debt, and alimony. Otherwise, they are exempt from wage garnishment.

Usually, income from the exempted sources remains protected even after it gets to your bank account. Even though you know what income cannot be garnished, it’s good practice to put exempt and non-exempt money in separate bank accounts. This is to make sure that exempt monies are not improperly garnished.

 

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