CPS Garnishments & Levies 2 — Questions and Answers
Question 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?
- 50%
- 55%
- 60%
- 65% (Correct answer)
Correct 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.
Question 2: Which IRS form is issued to an employer to initiate a continuous wage levy for unpaid federal taxes?
- Form W-4
- Form 668-W (Correct answer)
- Form 941
- Form 1099-MISC
Correct 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.
Question 3: Which of the following voluntary deductions is NOT subtracted when calculating an employee's disposable earnings for CCPA garnishment purposes?
- Federal income tax withholding
- Employee Social Security (FICA) contributions
- Employer-sponsored health insurance premiums paid by the employee (Correct answer)
- Medicare tax withholding
Correct 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.
Question 4: What is the minimum weekly earnings amount that is always exempt from an ordinary creditor garnishment under the CCPA, regardless of other calculations?
- 20 times the federal minimum wage
- 25 times the federal minimum wage
- 30 times the federal minimum wage (Correct answer)
- 40 times the federal minimum wage
Correct 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.
Question 5: What consequence may an employer face for failing to comply with a valid court-ordered garnishment?
- A verbal warning from the court with no financial penalty
- Potential personal liability for the amount that should have been withheld (Correct answer)
- Only the employee faces legal consequences for non-payment
- The garnishment order is automatically voided after 30 days of non-compliance
Correct 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.
Question 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?
- 10%
- 15% (Correct answer)
- 20%
- 25%
Correct 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.
Question 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?
- Apply it immediately by exceeding the CCPA limits since two separate orders exist
- Hold it in queue and begin withholding only when capacity becomes available (Correct answer)
- Return it to the issuing court as legally unenforceable
- Split available withholding capacity equally between both orders
Correct 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.
CPS Garnishments & Levies 2
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?