How an IRS wage levy works
The IRS sends your employer a notice of levy on wages (Form 668-W). Your employer must then send the IRS everything above an exempt amount from each paycheck, which is based on your filing status, standard deduction and number of dependents. The exempt amount is often much less than people expect, which is why a wage levy can be so disruptive.
Unlike most private creditors, the IRS doesn't need a court order to levy wages. It does have to send the required final notice first.
Getting it released
- Resolve the balance through an installment agreement, an Offer in Compromise or full payment.
- Show economic hardship if the levy leaves you unable to pay basic living expenses.
- Make sure the exempt amount is right. Return the exemption statement your employer gives you so dependents are counted; otherwise the IRS uses the minimum.
- File any missing returns, since the IRS generally requires compliance before agreeing to most resolutions.
What we do
We contact the IRS on your behalf, document your income and expenses on the IRS's financial forms, and negotiate the release, usually by putting an affordable payment plan in place.
Frequently asked questions
How much of my paycheck can the IRS take?
Everything above the exempt amount, which is based on your standard deduction and dependents. For many people that's a large share of take-home pay.
Does my employer have a choice?
No. An employer that receives a wage levy must comply and can be held liable for amounts it fails to send.
How quickly can a wage levy be released?
Once an acceptable resolution is reached, the IRS issues a release to your employer. The speed depends on getting your returns filed and your financial information in order.
Will a wage levy end on its own?
Generally not. A wage levy is continuous until the balance is paid, the collection period expires, or the IRS releases it.