You count on every cent you receive in your paychecks. Discovering that the California Franchise Tax Board (FTB) has decided to garnish your wages can be both a financial and an emotional blow to you.
The good news? The FTB may threaten to collect debt from you by seizing a portion of each of your paychecks, but you have the right to fight back to protect your wages.
Here’s an overview of how wage garnishment works in California, and what you should do once you receive a garnishment notification.
A Look at the FTB and the Garnishment of Wages
The FTB may issue you a wage garnishment order if it notices that you’ve got delinquent debt. As part of the garnishment process, the board will take a particular percentage of the earnings you generate while working for an employer. The basis for wage garnishment includes balances from debts that you owe to courts or government agencies, taxes, interest, fees, and penalties.
How Much of Your Earnings Could You Lose Through FTB Garnishment?
The board has the authority to garnish as much as 25% of the disposable income you bring in. Your income includes what is left over after legal deductions, like state disability, state/federal income tax, and Social Security tax, have been taken out.
How Does the FTB Kick Start the Wage Garnishment Process?
The FTB must first send a withholding notice to your employer prior to garnishing your wages. This notice has to include certain pieces of information, including how much should be garnished. However, just because the FTB issued a notice doesn’t automatically mean that the board is right.
When a garnishment notice is issued, be sure to check it to make sure that the information in it is indeed correct. Is the FTB charging you a fair amount? Also, double-check to see if you perhaps have already paid the amount that the FTB is charging.
Note that if the FTB comes after your wages, it has likely filed a lien against you as well. The lien could have been filed on the vehicles or other property that you own. The agencies that report your credit scores may pick up this lien as well.
A Look at the Internal Revenue Service (IRS) and Wage Garnishment
It is also within the IRS’s rights to garnish your wages if you owe tax money to the federal government. However, as with the FTB, the IRS cannot dock your income before first sending a notice for payment. If you don’t satisfy the agency’s payment demand, the IRS must then send a levy notice to you, which will let you fully pay your debt in 30 days or secure another solution without consequence. For instance, you could seek a plan to make debt payments, or you could make an offer in compromise to the government.
If you still fail to pay your debt, the IRS will begin the process of seizing your wages/assets by sending a garnishment order to your employer.
What to Do After You Receive a Wage Garnishment Notification
Once you receive garnishment threats, it is within your rights to appeal the government’s decision to garnish your wages. For instance, if you don’t believe that you are truly responsible for any of the debt that the IRS is pursuing, you can dispute the garnishment process. In the same way, if the garnishment process will cause major harm to your monetary situation, you can challenge garnishment.
You could also escape the garnishment process if you can prove that you have undergone financial hardship. Along the same lines, your garnishment issue will go away if you decide to declare bankruptcy.
Receive Help with Your Income Garnishment Issue from Delia Law Tax Law Firm
The idea of losing a chunk of your income to wage garnishment can understandably seem scary. However, if you are facing a wage garnishment issue, you are not alone. We at Delia Law can take a look at your monetary situation and create a plan for determining the most appropriate tax resolution in your case.
For example, we can help you to negotiate a payment plan you can afford. Or, we can work to settle your tax debt via an offer in compromise. We’ll make sure that you fully understand all of your rights and that you choose the best solution in light of the circumstances surrounding your case.
Get in touch with us today to learn more about how we can help you to put an end to wage garnishment worries once and for all.