Home | Wage Garnishments: One of the Biggest Threats to W-2 Taxpayers with a Tax Debt

Wage Garnishments: One of the Biggest Threats to W-2 Taxpayers with a Tax Debt

Jan 16, 2023

Imagine this: you have worked hard for your employer for the last two weeks, and when you receive your paycheck, it is significantly less than you were expecting! Your heart starts racing, and you immediately think, “wait, this can’t be right!” You look at the paystub attached, and you see the typical withholdings from your paycheck for taxes and your medical insurance, but then you see a line that says, “Wage Garnishment” or “Tax Levy,” and a significant portion of your hard-earned wages deducted.

Is this real? Can the IRS or state taxing authorities garnish my wages?

Unfortunately, yes. One of the biggest threats to wage earners who have a tax debt is the garnishment of their income. A taxpayer with a tax debt that hasn’t been resolved can be in jeopardy of the IRS or State issuing an order to a taxpayer’s employer to garnish a portion of their wages. Although the IRS and many of the States have lowered the number of garnishments issued during the last 3 years largely due to COVID and staffing issues, the taxing authorities are now ramping up enforced collection actions again, and wage garnishments are one of the first types of enforcement action that will increase.

What is a wage garnishment?

A wage garnishment is a legal order issued to your employer by the IRS or state mandating that a certain percentage of your wages be withheld and given to the taxing authorities instead of you. From a tax perspective, the garnishment can be issued for any tax account you are responsible for, and any period that has a past-due balance not being addressed by a resolution plan.

How will I find out that a wage garnishment has been issued?

The garnishment order will be sent directly to your employer, with a copy mailed to your last known address. Unfortunately, most taxpayers receive a copy of the garnishment order several days after their employer, so the first advisement that the action has happened typically will come directly from your employer. It can be an awkward and embarrassing situation to be in, but it is not uncommon as most employers in the United States have received garnishment notifications on prior or current employees.

How much of my income will be taken, and when?

The amount that will be seized from this garnishment will depend on the issuing tax authority, your filing status, and the number of people in the household. The taxing authorities are required to allow a certain amount of take-home pay for taxpayers with a wage garnishment, but in our experience, this amount is rarely enough to live off of.

For example, the IRS’ 2023 allowances for wage garnishment for an individual who reported married filing jointly with three dependents on their W-4 and who is paid weekly by their employer would only allow $803.83 to be exempt from the levy. Any income received above and beyond that figure would be confiscated by the employer and submitted to the IRS for application to the past due taxes owed (See IRS Publication 1494 rev. 2023).

How long will It last?

Wage garnishments are typically in place until the debt is paid in full or the taxing authority issues a release to your employer, whichever comes first. The taxing authority can issue a release without full payment if the release is part of a negotiation made through a commitment to address the past-due taxes owed.

Once a garnishment is issued, how do we make it stop?

If you have a wage garnishment in place from a taxing authority, we recommend contacting a Tax Resolution Specialist immediately. A Tax Resolution Specialist will speak to the taxing authorities on your behalf and will attempt to negotiate a release or reduction based on your current financial needs. At Golden Lion Tax Solutions, our team makes these types of negotiations our highest priority. We understand that time is of the essence, and the faster we can complete this negotiation, the less behind you’ll become on you and your family’s necessary monthly expenses. We will work as quickly and succinctly as possible to address the issue and use our years of experience to provide the swiftest relief available.

If I don’t already have a wage garnishment, what actions can I take to prevent one from being issued?

The taxing authorities typically use wage garnishments as an “attention getter” for taxpayers that have delinquent accounts and haven’t made efforts to resolve the delinquency. The best way to ensure a wage garnishment is not issued against you if you owe a tax debt is to be proactive and hire a Tax Resolution Specialist to begin addressing your case immediately. By involving a specialist, you are displaying to the taxing authorities that you understand the tax debt is a problem and that you are committed to resolving the issue. Our Tax Specialists work very hard to advocate on your behalf while using the tax code to protect you from this or any other enforcement action. Simultaneously, we will work with you to take the steps necessary to implement the resolution we negotiate on your behalf.


Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.