How is take-home pay determined for an employee subject to a federal tax levy?
Author: Ryan F. Donovan
Upon receipt of a garnishment, the employee is given the opportunity to fill out a worksheet that helps the agency determine what the employee's take-home pay will be. This form helps the IRS determine what the employee's marital status and exemptions should be. Form 668-W helps determine what the take-home pay shall be once the marital status and exemptions are determined. Note that the employee's filing status on the W-4 does not have any bearing on what will be applied on the Form 668-W.
Once the employee's take-home pay is determined, any voluntary or involuntary deductions in place at the time the order is issued are included in the take-home pay calculation. Subsequent to the order being in place, any voluntary changes made by the employee will cause the take-home pay to change. If the net pay that would otherwise exist is due to something outside of the employee's control, then the take-home pay will remain the same.