ADP Garnishments and Deductions

Question 1

Under the Consumer Credit Protection Act (CCPA), what is the maximum percentage of disposable earnings that can be garnished for a standard creditor garnishment when the employee supports another spouse or child?

Accepted Answer

25%

Answer

The CCPA limits standard creditor garnishments to 25% of disposable earnings (or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less).

Question 2

When an employee has both a child support withholding order and a creditor garnishment, which obligation takes priority?

Accepted Answer

Child support withholding order

Answer

Child support withholding orders have priority over all other garnishments, including creditor garnishments, by federal law.

Question 3

Which of the following best defines 'disposable earnings' for garnishment purposes?

Accepted Answer

Earnings remaining after legally required deductions

Answer

Disposable earnings are the amount remaining after legally required deductions such as taxes, Social Security, and Medicare are withheld — not voluntary deductions like 401(k).

Question 4

An employer in ADP receives a federal tax levy (Form 668-W) for an employee. What amount is exempt from the levy?

Accepted Answer

The amount determined by Part 3 of Form 668-W based on filing status and dependents

Answer

The exempt amount from a federal tax levy is determined by Part 3 of IRS Form 668-W, which considers the employee's filing status and number of dependents.

Question 5

What is the maximum percentage of disposable earnings that can be withheld for child support when an employee is NOT supporting another spouse or child and is 12 or more weeks in arrears?

Accepted Answer

65%

Answer

When an employee is not supporting another family and is 12 or more weeks in arrears, the CCPA allows up to 65% of disposable earnings to be withheld for child support.

ADP - ADP Certified Payroll Specialist Practice Test

ADP - ADP Certified Payroll Specialist Practice Test

ADP Garnishments and Deductions