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How much can the IRS garnish from my paycheck?

On Behalf of | Jul 3, 2023 | Tax |

If you are behind on your taxes, working with the Internal Revenue Service (IRS) to pay it back is the best solution. Otherwise, the agency can take legal action by issuing a levy on your wages. If you owe taxes and have received multiple notices to pay, the IRS can take a sizable chunk of your salary if you continue to ignore them.

Payment notices to expect before garnishment

The IRS can force nonpaying citizens to pay what they owe by seizing their property or wages. Wage garnishment is an IRS levy that permits the agency to deduct a specific amount from your paycheck to satisfy your tax debt. However, the IRS sends multiple notices before doing so.

If you have an overdue tax balance, expect to receive these notices from the IRS at your last known address:

  • A notice and demand for payment (CP14, CP501, CP503)
  • A notice of intent to levy (CP504)
  • A notice of your right to a Collection Due Process (CDP) hearing (LT11 or Letter 1058)

An LT11 or Letter 1058 is the final warning you will receive from the IRS. It advises you of the right to request a special hearing to set up a payment plan or contest your tax and penalties. However, you only have 30 days after receiving the notice to schedule a hearing. Otherwise, the IRS will proceed with wage garnishment 15 days after the deadline.

How much will the IRS take from your paycheck?

Before giving part of your pay to the IRS, your employer should receive a Form 668-W notice from the IRS. After that, they have no choice but to comply with the agency.

The garnishment amount depends on how much tax you owe, the number of dependents you have, the pay period and your filing status. Publication 1494 will guide your employer on how much of your salary is exempt from garnishment.

Following the 2023 example, a single individual earning weekly income and claiming three dependents receives $537.49 exempt from the levy as their take-home pay.

The IRS is exempt from state and federal wage garnishment limitations, so they are able to seize a significant portion of your salary. Delaying payments can only worsen your tax obligations. You may seek a tax attorney for guidance on how to set up and negotiate a payment plan with the IRS.