Wage Garnishment Laws by State: A Taxpayer’s Guide

A wage garnishment is a legal order authorizing an employer to withhold a portion of an employee’s paycheck to satisfy a debt. However, there are different wage garnishment laws by state.

There are limits to what income can be garnished, and how much can be garnished.

Generally, private creditors can garnish less and face much greater opposition than child support garnishments and wage levies for unpaid taxes. Wage garnishment rules typically differ across state lines, but there are federal rules on which many states base their own laws.

 

Federal Wage Garnishment Rules

Federal wage garnishment rules for non-tax, non-alimony, and non-child support debts are based on disposable earnings, which include any “compensation paid or payable for personal services”, minus state and federal taxes, social security and Medicare taxes, State Unemployment Insurance tax, and any amounts withheld for required employee retirement systems.

While many of us understand disposable income to be wages minus taxes and living expenses, living expenses are not calculated when determining wage garnishment.

Instead, federal wage garnishment law limits the total garnishment to the lesser of:

      • 25 percent of an individual’s disposable earnings, or;
      • 30 times the federal minimum wage.

States can set more stringent limits but are required to at least meet federal requirements. The different limits to wage garnishments from state to state are meant to reflect the differences in cost of living and wages across the US. Some states protect debtors better than others. A court judgment is needed to serve a debtor an order for wage garnishment, unless the debt is due to alimony, child support, unpaid local or federal taxes, or student loans.

 

Different States, Different Wage Garnishment Laws

When examining wage garnishment laws by state, there are a few things to note. Any states not explicitly listed below follow the federal rules for wage garnishment limits.

Note that there may be individual exceptions for child support, spousal support, alimony, unpaid taxes, and student loan debts. Child support liability, for example, can usually be more aggressively pursued than other debts. Refer to your state’s website for more information.

Alaska: Alaska imposes several additional exemptions to wage garnishment laws, as per the Alaska Exemptions Act.

Arkansas: Wage garnishment limits in Arkansas follow federal law, but laborers and mechanics have additional protections.

California: Wage garnishment limits in California follow federal law, but garnishment is calculated as the lesser of either 25 percent of a person’s disposable earnings, or disposable earnings minus 40 times California’s hourly minimum wage.

Connecticut: Wage garnishment laws in Connecticut are strict. Garnishments are limited to the lesser of either 25 percent of a person’s disposable earnings, or disposable earnings minus 40 times the federal hourly minimum wage/Connecticut’s minimum fair wage (whichever is greater).

D.C.: The wage garnishment limits in D.C. are the lesser of 25 percent of a person’s disposable earnings, or disposable earnings minus 40 times the state’s hourly minimum wage. Exemptions are slated to rise every year based on the state’s cost of living.

Hawaii: Hawaii’s wage garnishment limits are based on the more favorable of two calculations – the federal limits, and Hawaii’s own formulation. Hawaii’s own formulation uses monthly disposable earnings as a base, and takes 5 percent of a person’s first $100, 10 percent of the second $100, and 20 percent of the remainder. If the final total exceeds federal limits, federal limits are used instead.

Illinois: Illinois’ wage garnishment limits are very strict and are limited to the lesser of 15 percent of a person’s gross wages, or disposable earnings minus 45 times Illinois’ minimum wage.

Indiana: Indiana follows federal rules for wage garnishment laws but gives individuals the right to argue a reduction to 10 percent of their disposable earnings in the first payment.

Iowa: Iowa follows federal rules for wage garnishment limits but imposes an extra limit on how much can be garnished from an individual’s wages within a calendar year based on their annual income. For example, an individual with an annual income between $16,000 and $23,999 can only be made to give up a total of $800 in garnished wages over the entire year. Anyone earning $50,000 or more can only be levied for 10 percent of their annual income.

Maine: Maine’s wage garnishment limits follow federal law, except that the greater of either 40 times the federal minimum wage or the state minimum wage is chosen when calculating exemptions.

Maryland: Maryland wage garnishment laws differ from county to county. It’s best to contact a local legal professional for more information or refer to your county’s offices for help.

Massachusetts: Massachusetts limits wage garnishments to the lesser of 15 percent of an individual’s gross wages, or disposable earnings minus 50 times the federal/state minimum wage (whichever is greater).

Minnesota: Minnesota follows federal exemption limits but ups the exemption to the lesser of 25 percent of an individual’s disposable earnings, or disposable earnings minus 40 times the federal minimum wage.

Mississippi: Mississippi follows federal exemption limits but prevents creditors from garnishing any wages within the first 30 days after a garnishment order is served.

Missouri: Missouri follows federal exemption limits but adds greater protections to the head of the household, limiting wage garnishment to the lesser of 10 percent of one’s disposable earnings, or disposable earnings minus 30 times the federal minimum wage.

Nevada: Nevada increases wage garnishment limits to the lesser of 25 percent of one’s disposable earnings, or disposable earnings minus 50 times the federal hourly minimum wage.

New Hampshire: wage garnishments in New Hampshire are not continuous and are limited to the lesser of 25 percent of one’s disposable earnings, or disposable earnings minus 50 times the federal hourly minimum wage. If a creditor wants to claim more than two weeks of wages, they must keep going back to court.

New Jersey: New Jersey’s wage garnishment limits include up to 10 percent of disposable earnings if an individual earns no more than 250 percent of the federal poverty level for their household, or 25 percent for anyone earning more.

New Mexico: New Mexico increases wage garnishment limits to the lesser of 25 percent of one’s disposable earnings, or disposable earnings minus 40 times the federal hourly minimum wage.

New York: New York’s wage garnishment limits are the lesser of 10 percent of one’s gross wages, or 25 percent of one’s disposable earnings. If the disposable earnings are less than 30 times NY’s minimum wage, the individual’s wages cannot be garnished.

North Carolina: North Carolina limits wage garnishment to 10 percent of gross wages.

Pennsylvania: Wages in Pennsylvania can only be garnished for certain types of local taxes, student loan defaults, restitutions in criminal cases, child/spousal support, back rent, and divorce distributions.

South Carolina: South Carolina features different restrictions depending on the type of debt and has completely outlawed wage garnishments for consumer debts.

South Dakota: South Dakota limits wage garnishment to the lesser of 20 percent of your disposable earnings minus $25 per dependent, or disposable earnings minus 40 times the federal hourly minimum wage, and an additional $25 deduction per dependent.

Tennessee: Tennessee reflects federal wage garnishment limits but provides additional protections to individuals supporting minor children ($2.50 per dependent, per week).

Texas: Texas only allows wage garnishments for income tax debt, alimony, child support, and defaulted student loans.

Virginia: Virginia limits wage garnishment to the lesser of 25 percent of a person’s disposable earnings, or disposable earnings minus 40 times the federal hourly minimum wage.

Washington: Washington limits wage garnishment to the lesser of 25 percent of a person’s disposable earnings, or disposable earnings minus 35 times the federal hourly minimum wage. Exceptions are made for child support where more can be garnished.

West Virginia: West Virginia has limited wage garnishment to the lesser of 20 percent of a person’s disposable earnings, or disposable earnings minus 30 times the federal hourly minimum wage.

Wisconsin: Wisconsin has limited wage garnishment to the lesser of 20 percent of a person’s disposable earnings, or disposable earnings minus 30 times the federal hourly minimum wage.

 

IRS Wage Garnishments and Unpaid Tax are Calculated Differently

It’s important to note that any wage levies by the IRS are handled separately from other wage garnishment orders. Instead, the IRS claims wage levies when taxpayers have a significant amount of unpaid taxes and refuse to pay or negotiate a payment plan.

The IRS can levy wages for as long as they must in order to satisfy the debt and can claim a sizeable cut of a person’s wages based on their total number of dependents. The IRS requests employers to withhold pay based on Publication 1494. Employers must give their employee a Statement of Dependents and Filing Status, which they must fill out and return within three days. There are no state-to-state differences for wage levies for unpaid taxes to the federal government.

On the other hand, there may be different wage garnishment rules for unpaid state taxes. Refer to your local government’s revenue service or visit a local tax professional for more information.

 

Contact a Tax Professional

Because of the different wage garnishment laws by state, it can get difficult to deal with garnishments. If you have received a wage garnishment notice, contact our team of professional tax attorneys. We will fight vigorously to protect your assets and find a resolution that works for you.

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