Wage Garnishments: How the IRS Collects from Your Paycheck

How the IRS garnishes wages (wage levies) and what rights you have

A wage garnishment is commonly used to describe the IRS’s collection tool known as a wage levy. When the IRS determines you owe unpaid federal taxes and prior notices are ignored, it can legally require your employer to withhold part of your pay and send it to the IRS. This collection method is powerful because it reaches earned income at the source and continues until the assessed tax, penalties, and interest are fully paid or the IRS releases the levy.

This article explains the legal steps the IRS must take before levying wages, how employers calculate the amount to send, what income is protected, your rights and appeals, and practical steps to stop or reduce a payroll levy. The guidance below cites IRS rules and collection procedures current through 2025. For authoritative IRS guidance, see Publication 594 (The IRS Collection Process) and the Form 668-W information on IRS.gov.

IRS terminology: levy vs. lien vs. garnishment

• Tax lien: a public claim against your property to secure the government’s interest (see our guide on “Tax Liens and Levies: What They Mean and How to Stop Them” for more detail: https://finhelp.io/glossary/tax-liens-and-levies-what-they-mean-and-how-to-stop-them/).
• Levy (tax levy or wage levy): the legal seizure of property or rights to property to satisfy a tax debt. A wage levy is when the IRS seizes a portion of your pay.
• Wage garnishment: often used interchangeably with levy in everyday language. For non-tax debts (consumer creditors), federal garnishment rules differ; the Consumer Financial Protection Bureau explains those differences.

The IRS must follow specific notice and procedural steps under Internal Revenue Code §6331 and related guidance before it can levy your wages. You cannot be levied without receiving proper IRS notices first.

Step-by-step: How the IRS typically moves from notice to payroll levy

1. Notice and demand for payment: After an assessment, the IRS sends a Notice and Demand for Payment (often seen as the CP14 or balance-due notice). This is the first formal step that tells you how much is owed.
2. Final Notice of Intent to Levy and Notice of Your Right to a Hearing: If the balance remains unpaid, the IRS must send a final notice (often called the Notice of Intent to Levy; common IRS notice numbers include CP90 or CP297) at least 30 days before issuing a levy.
3. Opportunity to request a Collection Due Process (CDP) hearing or equivalent: You have a limited window—generally 30 days from the date of the final notice—to request a CDP hearing with the IRS Office of Appeals or to pursue other collection alternatives.
4. Levy issued to employer: If you do not resolve the debt or request an appeal within the allowed time, the IRS can send Form 668-W (Notice of Levy on Wages, Salary, and Other Income) to your employer. The employer is legally required to obey the levy.

Source: IRS collection procedures (see IRS Publication 594 and Form 668-W information at irs.gov).

How employers calculate what to hand over (disposable earnings and exemption amounts)

Employers do not simply hand over a flat percentage of your paycheck. Federal rules direct employers to compute the “disposable earnings” subject to levy using a standardized worksheet and exemption table provided by the IRS (Publication 1494 and the Form 668-W instructions). In practice:

• Disposable earnings = gross pay minus legally required deductions (federal taxes, Social Security, Medicare, state withholding when applicable).
• From disposable earnings, the employer applies exemption amounts for your pay period and family size using the IRS table; only the amount above the exempt threshold is remitted to the IRS.

That exemption table is updated periodically; employers rely on IRS guidance to determine the correct exempt amount. This means the actual withheld sum varies by pay period, pay frequency, and number of dependents.

What income the IRS generally cannot seize (common protections and exceptions)

Certain types of income are protected from ordinary garnishment or are treated specially. Important points:

• Court-ordered tax levies target disposable earnings, but some federal benefits are exempt from garnishment for most creditors. However, program-specific offsets (like the Treasury Offset Program) can still reduce federal payments in certain cases.
• For non-tax debt garnishments, the Consumer Credit Protection Act (CCPA) sets limits and protects employees from being fired because of a single garnishment; consult the CFPB for consumer garnishment rules.

Because exemptions and offsets depend on law and program rules, review IRS guidance or seek professional help before assuming a particular source of income is untouchable.

Your rights and basic remedies (what you can do immediately)

1. Read every IRS notice carefully and act quickly. The 30-day window after a final notice is critical for requesting a hearing.
2. Request a Collection Due Process (CDP) hearing or an Equivalent Hearing. A CDP appeal can stop collection action (including levy) while the appeal is pending in many cases. See IRC §6330 and IRS guidance for details.
3. Propose a collection alternative before the levy: set up an installment agreement (monthly payments), submit an Offer in Compromise (settle for less than you owe if eligible), or request Currently Not Collectible status if you can show that a levy creates economic hardship.
4. Ask for a levy release for hardship: The IRS can release a levy if it causes immediate economic hardship (insufficient income to meet basic living expenses). You’ll need to provide a completed financial statement (for example, Form 433-F or the forms the IRS requests) and supporting documentation.
5. Pay the balance in full: obviously the quickest remedy, but typically not feasible for many taxpayers.

If you prefer a structured repayment option, see our guide on installment agreements (Installment Agreements Explained: Types, Qualifications, and Costs): https://finhelp.io/glossary/how-to-apply-for-an-irs-installment-agreement-types-and-eligibility/.

How to request a release or stop a wage levy (practical steps)

1. Verify you received the IRS final notice and note the date—this starts appeal deadlines.
2. Call the phone number on the notice or contact the IRS Collection Office shown on the letter. Keep records of every call.
3. Complete and submit any financial forms the IRS requests (Form 433-F or Form 433-A for individuals, for example) with supporting pay stubs, bank statements, and household budget items.
4. If you qualify for Currently Not Collectible status or can show hardship, request immediate release of the levy while you work with the IRS on a long-term solution.
5. If the levy has already started and your employer received Form 668-W, your employer can remit amounts per the levy until the IRS issues a release — you may need to request a refund from the IRS after showing the collection was improper.

Documentation, persistence, and timely appeals are key. If you are unsure, get professional help; collection matters can become technically complex fast.

Employer obligations and your protections at work

• Employers must comply with an IRS levy and may face penalties for not honoring Form 668-W.
• For non-tax garnishments, federal law (CCPA) protects employees from being fired because of a single wage garnishment; check state laws for additional protections.
• If an employer gives you only part of your pay or treats you differently because of a levy, consult a labor attorney or the Department of Labor guidance.

Common misconceptions

• Myth: The IRS can garnish wages without warning. Fact: The IRS must send specific notices and allow time to respond before levying (see IRS Publication 594).
• Myth: You can’t do anything once a levy starts. Fact: You can still negotiate an installment agreement, request innocent spouse relief, ask for currently not collectible status, or pursue a CDP hearing in many cases.
• Myth: Social Security and all federal benefits are always safe. Fact: Some federal benefits are protected from garnishment by most creditors, but program-specific offsets and collection programs may still apply; always confirm for your benefits.

When to get professional help

If you owe significant tax, face multiple levies, or receive confusing IRS notices, speak with a qualified tax attorney, enrolled agent, or CPA experienced in IRS collections. In my practice I routinely review levy notices, prepare financial statements, and negotiate installment agreements or offers in compromise—effective representation can stop a levy faster and reduce financial harm.

For procedural detail about tax levies, appeals, and how liens interact with collection efforts, see our related glossary page: “Tax Liens and Levies: What They Mean and How to Stop Them” (https://finhelp.io/glossary/tax-liens-and-levies-what-they-mean-and-how-to-stop-them/).

Checklist: If you received a final IRS levy notice

• Do not ignore the notice — note the date and appeal deadline.
• Call the IRS contact number on the notice, and request time to provide financial information.
• Gather pay stubs, bank statements, and monthly bills.
• Consider applying for an installment agreement or submitting Form 433-F.
• If you have low income, request Currently Not Collectible status.
• If levy has begun, collect proof of hardship and request immediate release.

Sources and further reading

• IRS, Publication 594, The IRS Collection Process (see irs.gov for the current version).
• IRS Form 668-W, Notice of Levy on Wages, Salary, and Other Income (irs.gov/forms-pubs).
• IRS Publication 1494 and wage levy worksheets (employer instructions on irs.gov).
• Consumer Financial Protection Bureau: guides on wage garnishment and consumer protections (consumerfinance.gov).

Professional disclaimer: This article is educational and does not replace personalized tax advice. Collection rules change and cases vary—consult a licensed tax professional or attorney for advice tailored to your situation.

If you’d like help interpreting a specific IRS notice, I recommend saving the notice scan and contacting a tax professional experienced in collection matters.