Practice Test Geeks(CPS) Certified Payroll Specialist Practice Test
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Garnishments & Levies Flashcards

7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Garnishments & Levies flashcards as text

  1. For child support garnishments, what is the maximum percentage of disposable earnings that can be withheld when the employee is NOT supporting another spouse or child and is MORE than 12 weeks in arrears?

    Answer: 65%

    When an employee has no other dependents and is 12 or more weeks behind on support payments, up to 65% of disposable earnings may be garnished for child support.

  2. Which IRS form is issued to an employer to initiate a continuous wage levy for unpaid federal taxes?

    Answer: Form 668-W

    IRS Form 668-W (Notice of Levy on Wages, Salary, and Other Income) is served on employers to establish a continuous wage levy until the tax debt is resolved.

  3. Which of the following voluntary deductions is NOT subtracted when calculating an employee's disposable earnings for CCPA garnishment purposes?

    Answer: Employer-sponsored health insurance premiums paid by the employee

    Voluntary deductions such as health insurance premiums, 401(k) contributions, and union dues are not legally required and therefore are not subtracted from gross wages when computing disposable earnings.

  4. What is the minimum weekly earnings amount that is always exempt from an ordinary creditor garnishment under the CCPA, regardless of other calculations?

    Answer: 30 times the federal minimum wage

    The CCPA protects from garnishment any disposable earnings up to 30 times the federal minimum hourly wage per week, providing a guaranteed floor of exempt earnings.

  5. What consequence may an employer face for failing to comply with a valid court-ordered garnishment?

    Answer: Potential personal liability for the amount that should have been withheld

    An employer who ignores or fails to honor a valid garnishment order can be held in contempt of court and may become personally liable for the full amount that should have been withheld.

  6. A student loan Administrative Wage Garnishment (AWG) issued by the Department of Education can withhold a maximum of what percentage of an employee's disposable pay?

    Answer: 15%

    Federal student loan AWG is limited to 15% of disposable pay, which is lower than the 25% standard creditor garnishment limit under the CCPA.

  7. When an employee's disposable earnings are already at the CCPA maximum garnishment limit due to a child support order, how should a subsequently received creditor garnishment be handled?

    Answer: Hold it in queue and begin withholding only when capacity becomes available

    When existing garnishments have consumed the maximum allowable withholding, subsequent garnishments must be held and processed in order of priority once capacity opens up, not ignored or returned.