IRS has released Publication 1494 for 2022. You may need the tables contained in the publication if IRS informs you of a levy on an employee’s wages.
More specifically, the tables in Publication 1494 tell you how much of an employee’s take home pay is exempt from the levy.
You calculate the exempt amount based on the employee’s filing status and number of dependents. That info is indicated on a statement which the employee completes and returns to you. No time to waste: You should receive the statement from the employee within three days.
Levy examples tied to payroll frequency
Consider these examples when using Publication 1494:
Let’s say you have a biweekly payroll. According to the statement, the employee is married filing jointly, with two dependents. Then $1,334.61 would be exempt from levy.
Or you may have a weekly payroll. If the statement lets you know that the employee is a single taxpayer with three dependents, $502.90 would be exempt from levy.
If you haven’t received the statement from the employee within three days, you need to proceed anyway. You’d figure the exempt amount based on married filing separately, with zero dependents.
Be careful: In addition to wages, IRS takes into account salaries, fees, bonuses, commissions and other income for purposes of Publication 1494.
Finding out about a tax delinquency
An employer may learn of an employee’s tax delinquency when IRS sends Form 668-W(ACS), Form 668-W(ICS) or Form 668-W(C)(DO).
You generally have one full pay period after receiving a form before you need to send the employee’s funds to IRS.