CPS Garnishments & Levies 3

Question 1

What is an Income Withholding Order (IWO) used for in payroll processing?

Accepted Answer

Ordering the employer to deduct and remit child or spousal support payments from wages

Answer

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.

Question 2

Under federal law, within how many business days after the employee's payday must an employer remit withheld child support payments?

Accepted Answer

7 business days

Answer

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.

Question 3

When an employee receives IRS Form 668-W, what must the employee submit to the employer to determine the exempt amount from the levy?

Accepted Answer

The Statement of Exemptions and Filing Status (Part 3 of Form 668-W)

Answer

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.

Question 4

A 'writ of garnishment' is best described as:

Accepted Answer

A court order directing a third party such as an employer to withhold and remit funds owed by a debtor

Answer

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.

Question 5

Which statement correctly describes a 'continuing levy' versus a 'one-time levy' in the context of wage garnishments?

Accepted Answer

A continuing levy attaches to each successive paycheck until the debt is satisfied; a one-time levy applies only to a specific payment

Answer

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.

(CPS) Certified Payroll Specialist Practice Test

(CPS) Certified Payroll Specialist Practice Test

CPS Garnishments & Levies 3