Utah Divorce Code 30-3-5.1: Provision For Income Withholding In Child Support Order.
Whenever a court enters an order for child support, it shall include in the order a provision for withholding income as a means of collecting child support as provided in Title 62A, Chapter 11, Recovery Services.
What Is Child Support Withholding?
Only 60% of child support payments are received, meaning 40% of child support payments go unpaid. When a parent doesn’t voluntarily meet their child support obligations, employers might be involved in the child support process. According to the U.S. Department of Health & Human Services, 75% of child support payments are collected through child support withholding. As an employer, you may have to withhold child support from an employee’s wages at some point.
Child support withholding is a court-mandated payroll deduction. You will receive a withholding notice if you are required to make child support deductions from an employee’s wages. Typically, an employee’s disposable income is used to determine the limits of child support deductions. If a non-custodial parent has an unpaid child support debt and is your employee, a court or child support agency will send you an Income Withholding for Support (IWO) order. You cannot terminate an employee because of child support withholding. The Consumer Credit Protection Act (CCPA) protects employees whose wages are subject to garnishments for one debt. However, the CCPA does not protect employees with two or more garnishment orders. The IWO tells you which employee to withhold wages from, how much to withhold, and how to send payments to the appropriate state disbursement unit (SDU). Only use revised IWOs with an expiration date of August 31, 2020. Verify that the IWO has the correct expiration date, is unaltered, has all the necessary information, and lists withholding amounts as dollars. If you have any doubts about the IWO, contact the sender. Once you receive an IWO, you should withhold child support as soon as possible. Most states require that you start withholding no later than the pay period beginning 14 days after the agency mailed the IWO. If you don’t withhold child support after receiving an income withholding order, you will face penalties. You might be liable for the amount of the child support plus penalties and fines. Do not stop withholding child support if your employee asks you to. If the employee disagrees with the child support withholding notice, they must contact the court or agency that issued the IWO. Most states allow you to charge the employee an administrative fee for withholding child support. However, you cannot charge more than your state’s limit. Withhold the administrative fee from the employee’s wages, not from their child support payment.
How to Deduct Child Support from Payroll
You must withhold child support payments each pay period. But, a child support deduction from paycheck isn’t the only thing you withhold. Employee wages are subject to mandatory deductions. You must withhold federal, state, and local income taxes; Social Security and Medicare taxes; state unemployment tax, if applicable; and any other deductions determined by state law. Child support is not a pre-tax deduction. You must withhold child support after you withhold taxes. Because most child support orders are based on disposable net income, you need to know how to calculate the employee’s disposable income. Disposable personal income is what is left after you subtract mandatory deductions from the employee’s gross pay.
Disposable Income = Gross Pay – Mandatory Deductions
Keep in mind that disposable income is different than net pay, which is the employee’s take-home pay. Net pay might include other deductions, such as retirement plan contributions and health insurance premiums. Before you can deduct child support from the employee’s disposable income, you need to understand CCPA rules.
CCPA limits: Child support
You can only deduct up to a certain amount of an employee’s disposable income for child support withholding. The CCPA sets limits to prevent too much from being withheld from an employee’s disposable income. The amount you can withhold from an employee’s wages for child support withholding is known as allowable disposable income. You can find the employee’s allowable disposable income once you know how much their disposable income is and which CCPA limit to use.
The federal CCPA limits are:
• 50%: Employee supports another spouse or child
• 55%: Employee supports another spouse or child, and payments are more than 12 weeks late
• 60%: Employee does not support another spouse or child
• 65%: Employee does not support another spouse or child, and payments are more than 12 weeks late
Some states have lower withholding limits than the CCPA. To find out how much you can withhold for child support, use the following formula:
Allowable Disposable Income = Disposable Income X CCPA Limit
Only withhold up to the CCPA or state limit if the ordered payment amount on the IWO is more than the employee’s allowable disposable income. If the allowable disposable income is less than what the IWO orders, the remainder is added to the employee’s child support arrearages, which are handled by the child support withholding agency. An arrearage is an overdue amount that the employee still owes.
Remitting Child Support Payments
Remit withheld child support via check or electronic payment to the proper state disbursement unit after each payroll. Generally, you have seven business days to send the payment after paying your employee their wages, but some states have a shorter due date. Once you remit payments, the state will send the garnished wages to the custodial parent. Continue withholding and remitting child support deductions until you receive an order telling you to stop. If the employee leaves your business, you must notify the child support enforcement agency. Report terminated employees promptly, or according to your state’s due date. And, you may need to maintain IWOs for terminated employees in your records, depending on your state.
What to Do If You Receive Multiple Garnishment Orders
Child support isn’t the only type of garnishment you are required to withhold. Courts can issue garnishments for other unpaid debts, such as defaulted student loans, unpaid taxes, or outstanding medical bills. If you receive multiple garnishment notices for one employee, what do you do? Unless the employee has an existing federal tax lien, child support withholdings take precedence over all other garnishments. But if the employee has a federal tax lien that limits the amount you can withhold in child support, tell the child support agency.
How to Handle Multiple Child Support Withholdings
If you withhold child support for more than one employee, you might be able to remit one check or electronic payment per pay period to cover all child support withholdings. You can combine child support withholdings if the payments go to the same state disbursement unit. And, you must list and date each employee’s contribution and include an identifier. If one employee has multiple IWOs and not enough allowable disposable income to cover them all, you must withhold some money for each order. Depending on your state, you will either withhold a percentage of each order or divide the total amount of each order equally.
What Is an Income Withholding Order?
An income withholding order is a type of court order used in connection with child support proceedings. An income withholding order requires the parent making the child support payments to surrender a portion of their income for child support payments. This is usually directed towards the non-custodial parent. In an income withholding order, the court basically orders the paying parent’s employer to direct a portion of their income to be used for the child support payments. The employer must comply by deducting the specified amount for each pay period and sending it to a state agency such as a State Disbursement Unit (SDU). The state agency will then transfer the payment to the custodial parent. In most child support hearings, an income withholding order must accompany the formal child support order, unless both parents request the judge not to include one. Sometimes the order can be imposed separately from the support order. An income withholding order is sometimes referred to as a “child support withholding order” or a “wage withholding order”.
The term “Income” doesn’t only include the parent’s regular monthly wages. The support payments can also come from other sources such as:
• Commissions on sales
• Bonuses
• Worker’s compensation
• Disability payments
• Retirement or pension packages
How Does an Income Withholding Order Affect Other Types of Wage Garnishments?
It is common for the paying parent to have wage garnishments in other areas besides child support (for example, if they have outstanding debt). An income withholding order takes priority over all other forms of wage garnishment. This means that the child support payments should be deducted from the parent’s payments before any other garnishments can be made. The only exception to this rule is if the parent also has outstanding federal tax debt prior to the child support order being issued. In this case the federal government may obtain funds through the seizure and sale of property before child support payments are deducted from the parent’s income.
What are the Consequences for Violating an Income Withholding Order?
As part of a child custody order, income withholding orders are enforceable by law. If the parent violates an income withholding order in any way, they may face criminal consequences such as contempt of court charges, monetary fines, or a possible jail sentence. Similarly, most state statutes provide legal consequences (fines) against employers who knowingly violate the provisions of an income withholding order. Employers are also prohibited from refusing to hire, terminating, or otherwise disciplining an employee who has become involved in an income withholding order. Employers may not garnish more than the stated wage amount.
Will I Need a Lawyer for Assistance with an Income Withholding Order?
Child support proceedings are often very complicated. If you need assistance with an income withholding order, you may wish to contact a qualified family lawyer in your area. You may need an attorney to review the withholding order or to represent you during court hearings. A lawyer can help you address any disputes or concerns you may have with an employer.
Child Support Collection: Wage Garnishment & Property Seizure
If your child’s other parent sues you and gets a judgment against you for unpaid child support, that parent has a whole host of collection methods available (more than without a judgment for child support arrears). And even if the custodial parent got the judgment in one state and you have since moved to another state, that parent can register the judgment in the second state and enforce it there. The most common method of collecting a judgment for overdue support is wage garnishment. The custodial parent can also seize your personal property.
What Is Wage Garnishment?
A wage garnishment is similar to income withholding. A portion of your wages is removed from your paycheck and delivered to the custodial parent before you ever see it. In many states, the arrears need not be made into a judgment to be collected through wage garnishment.
Procedures for Wage Garnishment
To garnish your wages, the custodial parent obtains authorization from the court in a document usually called a writ of execution. Under this authorization, the custodial parent directs the sheriff to seize a portion of your wages. The sheriff in turn notifies you and your employer.
How Much Can the Court Take?
The amount garnished is a percentage of your paycheck. What you were once ordered to pay is irrelevant. The court simply wants to take money out of each of your paychecks and leave you with a minimum to live on until the unpaid support is made up. Under federal law, if a court orders that your wages be garnished to satisfy any debt except child support or alimony, a maximum of roughly 25% of your net wages can be taken. For unpaid child support, however, up to 50% of your net wages can be garnished, and up to 60% if you are not currently supporting another dependent. If your check is already subject to wage withholding for your future payments or garnishment by a different creditor, the total amount taken from your paycheck cannot exceed 50% (or 65% if you are not currently supporting another dependent and are more than 12 weeks in arrears).
How the Garnishment Is Initiated
To put a wage garnishment order into effect, the court, custodial parent, state agency, or county attorney must notify your employer. Once your employer is told to garnish your wages, your employer tells you of the garnishment.
You can request a court hearing, which will take place shortly after the garnishment has begun. At the hearing, you can make only a few objections:
• The amount the court claims you owe is wrong.
• The amount will leave you with too little to live on.
• The custodial parent actively concealed your child, as opposed to merely frustrating or denying your visitation (not all states allow this objection).
• You had custody of the child at the time the support arrears accrued.
If the wage garnishment doesn’t cover the amount you owe, or you don’t have wages or other income to be garnished, the custodial parent may try to get the unpaid support by going after other items of your property. Examples of the type of property that may be vulnerable include cars, motorcycles, boats, airplanes, houses, corporate stock, horses, rents payable to you, and accounts receivable. In some cases, even spendthrift trusts and your interest in a partnership may be used for payment.
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When you need legal help with divorce in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
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West Jordan, Utah
84088 United States
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