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Termination Notices for Private Employers

Published: September 28, 2011
Information About:
Employers
Topics:
Employer Responsibilities, Income/Wage Withholding
Types:
Guides/Publications/Reports

When to Report Terminations

A termination occurs when the employee quits, retires, is fired or laid off. All terminated employees who have child support income withholding orders should be reported as terminations to the child support agency that issued the withholding order. Reporting a termination should be done as soon as possible following the termination date.

Reporting a termination lets the agency know why the employer is no longer withholding child support deductions. The agency is thus alerted to issue a new income withholding order as appropriate. Even if the employee left during the first pay period, a termination report must be made because:

  • An employer-employee relationship existed,
  • The employee filled out a W-4 form,
  • A new hire report was submitted for that employee, and
  • A withholding order was received for that employee.

How to Report Terminations

Complete page 3 of the Income Withholding for Support (IWO) form and fax it to the issuer or some states will accept this information over the telephone or online. The employer should have the following information available:

  • Employee's name,
  • Employee's case identifier,
  • Last known home address,
  • New employer's address (if known), and
  • Date of separation.

States using the National Medical Support Notice (NMSN) require that additional information on medical support or insurance be reported, primarily to avoid interruption of medical coverage for the employee's child.

To avoid interruption of payments to the child and the accrual of arrears, the employee may make child support payments in his or her own behalf (until a new withholding order is issued).

Reactivation of Child Support Withholding Upon Rehire

If the employee is temporarily laid off (i.e., due to seasonal work), retain the income withholding order that was being honored prior to the termination. The amount of time that an income withholding order is kept on file following a termination varies from state to state. For example, some states require that an income withholding order be reactivated if the employee is rehired within 90 days.

Upon rehire, submit a new hire report if the employee completes a new W-4 form and reactivate the income withholding order. If possible, reactivate the medical support order as well. This will depend on the requirements of the health insurance plan.

When to Stop Withholding for Child Support

Do not stop withholding for child support until one of the following occurs:

  • An official notification to stop withholding is received from the issuing agency.
  • The employee is terminated, for whatever reason.
  • Bankruptcy proceedings are underway and a bankruptcy trustee takes over the withholding.