What Is IRS Form 668 W?
The IRS can take money from your paycheck when you have tax debt. Employers of employees who will have wages garnished by the IRS receive Form 668 W in the mail. This wage garnishment form includes how much the employer must withhold from an employee’s wages and why the employee’s wages are being garnished.
The IRS also mails this form when they intend to garnish retirement funds or pensions.
Why Did the IRS Send Form 668 W to My Employer?
The IRS offers several tax relief options to help an individual repay tax debt. When a taxpayer does not work with the IRS to resolve back taxes, however, the IRS may garnish wages to offset unpaid taxes.
If your employer received a 668 W, it means the IRS intends to garnish a percentage of each paycheck. IRS 668 W tells your employer how much money to deduct from your weekly, biweekly, or monthly payments.
How Does My Employer Calculate My Wage Garnishment Amount?
The IRS bases wage garnishment amounts on the number of dependents an employee is allowed. When your employer receives IRS 668 W, they will ask you to complete two forms within three days: filing status and statement of dependents.
Failing to return these two forms means the employee will automatically be considered as married filing separately with zero dependents.
What Is the Maximum Amount the IRS Can Garnish from My Wages?
The current IRS wage garnishment table according to gross income can be found at https://irs.gov/pub/irs-pdf/p1494.pdf.
One example from this table shows that a taxpayer who is married, filing jointly, claiming two dependents, and earning a biweekly paycheck would have $1,426 exempt from garnishment. In other words, if that taxpayer grossed $3,000 every two weeks, the IRS could take $1,574 from every paycheck.
How Soon After Receiving IRS 668 W Will My Employer Start Garnishing My Wages?
In most cases, the IRS will start wage garnishment 10 days from when they receive your completed 668 W documents from an employer. Garnishment may be delayed if the employee files an appeal with the IRS.
What Happens If My Employer Doesn’t Comply with Wage Garnishment?
If an employer fails to respond to Form 668 W, they are personally liable for up to 50% of an employee’s tax debt plus any penalty amounts. Noncompliant employers may also be held responsible for paying any court costs and fees resulting from legal proceedings.
In particularly egregious cases, an employer may be jailed for failing to abide by IRS rules regarding wage garnishment.
Can My Employer Fire Me When They Receive IRS Form 668 W?
Federal laws prohibit employers from firing an employee who is having their wages garnished by the IRS. However, if an employee has had multiple IRS wage garnishment requests, employers may be able to take some type of action against an employee, according to federal garnishment laws.
However, some states go beyond federal law when it comes to stopping an employer from firing a garnished employee. Extended protection for employees with multiple wage levies may be possible in certain states.
Can You Request an Appeal After Receiving an IRS Notice of Wage Garnishment?
Within 30 days of receiving a notice stating the IRS intends to garnish your wages for a tax debt, you can request a Collections Due Process (CDP) hearing to appeal the wage garnishment.
A final notice will explain your right to a CDP hearing which allows you to dispute the tax debt or discuss payment plans that you can afford based on your monthly income and expenses.
Be aware that your employer cannot help you resolve a wage garnishment issue with the IRS. The only responsibility of an employer is making sure the employee completes 668 W forms, submitting those forms to the IRS, and withholding the correct amount of wages.
When Does Wage Garnishment End?
The IRS will stop garnishing wages only when your taxes are paid in full, you are on an IRS payment plan, or the wage levy was released due to financial hardship. Otherwise, the IRS will keep taking money from each paycheck.
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