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Federal Agency Frequently Asked Questions on Income Withholding

Published: September 10, 2009
Information About:
Employers
Topics:
Employer Responsibilities, Income/Wage Withholding
Types:
FAQs

1. Is there a maximum amount of money that may be withheld from an employee's paycheck?

Yes, for all income withholdings, the upper limit on what may be withheld is based on the Federal Consumer Credit Protection Act (CCPA). The federal withholding limits for child support and alimony are based on the disposable earnings of the employee.

The Federal CCPA limit is 50% of the disposable earnings if the employee supports a second family and 60% if the employee does not support a second family. This limit increases to 55% and 65% respectively if the employee owes arrearages that are 12 weeks or more past due.

States may choose a lower limit. Check with your State to determine exact limits. (About two-thirds of the States use the Federal limits, and about one-third cap the withholding at 50% regardless of second families or arrearage amount.)

2. How soon must employers send the child support payment that was withheld from an employee's paycheck?

Employers need to send payment of the withheld wages within seven (7) business days, at the most, of paying wages to the employee. The State where the employer is located may set a shorter time limit for making payment.

3. What should the employer do if the employee tells the employer the withholding is for the wrong amount or that income should not be withheld?

The employee should contact the state child support enforcement agency if he/she disputes the order. The employer should make it clear that by law, until the employer is otherwise notified, the employer must comply with the terms of the withholding order as issued.

4. May employers combine the child support payments from several employees into one check?

Yes, employers may send one check each pay period to cover all child support withholdings for that pay period if:

  • They are all being sent to the same receiving agency (State Disbursement Unit), and
  • The employer itemizes the amount withheld from each employee, the date each amount was withheld, and a required identifier such as the case number.

5. How will the employer know when to stop income withholding for an employee?

In some cases, the income withholding order states a specific date when the amount should be changed or stopped. If no such instruction is contained in the order, the employer should continue withholding until the Child Support Enforcement Agency or court notifies the employer to change or stop the withholding.

6. Income withholding requires extra paperwork for the employer. May the employer charge a processing fee to the employee?

Most States allow the employer to charge the employee an administrative fee for processing the income withholding. Employers may contact their Child Support Enforcement Agency to learn what the administrative fee is in their state. Note that the total amount the employer withholds for child support plus fees may not exceed the maximum amount permitted under the Federal Consumer Credit Protection Act (CCPA).

7. What if the fee plus the child support payment exceeds the maximum allowable amount under CCPA?

If the fee plus the child support exceeds the maximum amount allowed to be withheld under the CCPA, the employer may take the entire amount of its administrative fee and make the child support payment less than the amount in the notice. The amount of support that was not paid because the employer deducted the administrative fee instead becomes part of the arrears owed by the non-custodial parent.

8. The employer received an income withholding order from a Child Support Enforcement Agency in another state. Must the employer send payments directly to the other state?

Yes. Under the Uniform Interstate Family Support Act (UIFSA), employers are required to honor an income withholding order from another State as long as the order appears to be "regular on its face."

9. How does the employer handle child support withholding when the employee already has garnishments or other income attachments against the paycheck?

Child support withholdings take priority over all other claims against the same wages except Federal tax liens that were entered before the child support order was established. When there are garnishments or income attachments other than Federal tax liens, the employer may honor the garnishments or income attachments only after satisfying the child support obligation (to the CCPA maximum allowed limit), provided the allowable limit for that type of garnishment has not already been exhausted by the amount of the child support withheld.

10. What should the employer do if it has received both an IRS levy and a child support income withholding order/notice for an employee?

The employer should notify the Child Support Enforcement Agency that a federal tax (IRS) levy was received in addition to the income withholding order/notice. The Child Support Enforcement Agency can inform the employer if the underlying child support order was in fact established prior to the date that the IRS levy was entered. If the underlying order was not established prior to the IRS levy, the child support agency can then contact the IRS to determine if the levy may be modified to allow withholding of any child support.