[mla1169]

Is there an authoritative source somewhere (preferrably on the IRS website, I just can’t find it there and I’ve looked) that says HOW exactly to calculate a levy on an employee’s pay?

ex: levy amount = gross pay-taxes-child support-health insurance-exempt amount

or levy amount = gross pay-taxes-child support-health insurance-401(k) loan repayment-exempt amount

I called the IRS directly and the oh so enthusiastic rep said example 1 “sounds just about right”.

I’d like something a little more exact than that LOL

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Massachusetts CPA (non reporting) since 3/12.

[jomarie]

The IRS should have given you a worksheet. It would have came with the levy notice. Stating, if an employee makes x amount, this x amount should be deducted for the levy.

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[Anonymous]

In my experience, jomarie is correct – the worksheet should have come with the levy notice and the worksheet is just a couple of simple calculations.

[Anonymous]

There is a difference between a garnishment and a levy. Typically a levy basically says withhold FICA, FICA-M, Fed W/H, State W/H, and send us the rest! It all depends on how far behind they are and why they are being levied. Garnishments usually take a percentage. Levy's can take it all.

[mla1169]

Thanks Kricket, thats exactly what I ultimately found out.

The worksheet for the levy is the opposite of that Jomarie. Instead of saying “take x”, it says the employee gets to keep x after the exempt amounts. The problem I was having is that nowhere does it list items that are exempt from the levy. Turns out its exactly what Kricket listed above.

The worksheet says a person with a tax status of “married filing joint” gets to keep $385. So you take their gross income-Fed w/h-state w/h-FICA-$385 is the amount you send the IRS. I just didn't know if you also subtract the medical insurance deduction, 401(k) contribution and 401(k) loan payment before you calculate the amount sent to the IRS. But those are all “voluntary” and come out of the $385 the employee is allowed to keep. So yes, the levy can take it all.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

Glad I could help!

[Author]

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