Garnishments and Deductions Flashcards

Which deduction type must always be withheld AFTER taxes are calculated, making it a 'post-tax' deduction?

Answer: Roth 401(k) contribution

Roth 401(k) contributions are made on an after-tax basis, meaning they are deducted after federal income tax is calculated, unlike traditional 401(k) deferrals which are pre-tax.

What happens in ADP if an employee's pay is insufficient to cover both a child support order and a creditor garnishment in the same pay period?

Answer: The child support order is paid first; the creditor garnishment receives remaining eligible funds

Child support orders take legal priority; if funds are insufficient to cover both, child support is fully satisfied first, and the creditor garnishment receives only the remaining garnishable amount.

Which ADP feature allows payroll specialists to track the total amount withheld and remitted for a specific garnishment order over time?

Answer: Deduction Balance Tracking / Garnishment Detail Report

ADP's Garnishment Detail Report and deduction balance tracking features allow payroll specialists to monitor cumulative amounts withheld and remitted for each garnishment order.

What is the penalty risk for an employer who fails to withhold a court-ordered child support garnishment from an employee's wages?

Answer: The employer may be held liable for the amount that should have been withheld

Employers who fail to comply with a child support withholding order can be held personally liable for the amount that should have been withheld, plus potential fines.

In ADP, when should a payroll specialist stop withholding for a garnishment order?

Answer: Only when instructed by the issuing agency or court via a release or satisfaction notice

Garnishment withholding should only cease when the employer receives an official release, satisfaction notice, or court order from the issuing agency — not based on employee requests alone.

What is the purpose of the 'income withholding order' (IWO) form standardized by the federal government?

Answer: To provide a uniform format for child support and alimony withholding orders sent to employers

The federal Income Withholding Order (IWO) is a standardized form used by all states to instruct employers to withhold child support and/or alimony from an employee's wages.

Under ADP best practices, what should a payroll specialist do when two garnishment orders with the same priority type are received for the same employee?

Answer: Process them in the order they were received, prorating if funds are insufficient

When multiple garnishments of the same priority type exist, employers generally process them in the order received and prorate if disposable earnings are insufficient to cover both.