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
What is an Income Withholding Order (IWO) used for in payroll processing?
Answer: Ordering the employer to deduct and remit child or spousal support payments from wages
An Income Withholding Order (IWO) is a standardized legal document directing employers to withhold child support or alimony from an employee's wages and remit those amounts to a state disbursement unit.
Under federal law, within how many business days after the employee's payday must an employer remit withheld child support payments?
Answer: 7 business days
Federal law (PRWORA) requires employers to remit child support withholdings to the state disbursement unit within 7 business days of the date the amount would have been paid to the employee.
When an employee receives IRS Form 668-W, what must the employee submit to the employer to determine the exempt amount from the levy?
Answer: The Statement of Exemptions and Filing Status (Part 3 of Form 668-W)
The employee must complete and return Part 3 of Form 668-W (Statement of Exemptions and Filing Status) so the employer can calculate the correct exempt amount using IRS Publication 1494 tables.
A 'writ of garnishment' is best described as:
Answer: A court order directing a third party such as an employer to withhold and remit funds owed by a debtor
A writ of garnishment is a judicial order issued to a third-party holder of a debtor's assets—typically an employer—requiring that funds be withheld from wages and remitted to satisfy a court judgment.
Which statement correctly describes a 'continuing levy' versus a 'one-time levy' in the context of wage garnishments?
Answer: A continuing levy attaches to each successive paycheck until the debt is satisfied; a one-time levy applies only to a specific payment
An IRS wage levy is a continuing levy, meaning it attaches to each paycheck automatically until the liability is fully paid or the IRS releases the levy; no repeated court or IRS action is required each period.
If an employee subject to a child support withholding order is paid bi-weekly, how should the employer determine the CCPA withholding limit that applies to the order?
Answer: Use the weekly limit multiplied by 2 to reflect the bi-weekly pay period
CCPA limits are expressed in weekly terms; for a bi-weekly pay period the employer multiplies the weekly limit figures by 2 (e.g., 30 × minimum wage × 2) to calculate the applicable bi-weekly threshold.
Which of the following actions is an employer legally required to take when it receives a child support Income Withholding Order for an employee who has already reached the maximum CCPA withholding limit due to another support order?
Answer: Notify the issuing agency that the maximum withholding limit is in effect and process the new order when capacity allows
Employers must notify the issuing agency when the CCPA maximum is already reached by an existing order and must queue the new IWO for processing in priority order once withholding capacity becomes available.