Federal garnishment procedures

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Important reminder!

Product support for Engagement CS is ending on September 30, 2020. See Engagement CS license expiration 2020 - frequently asked questions for more information.

Licenses for Payroll CS, Trial Balance CS, and Write-Up CS permanently expired on March 1, 2017.

Some processes documented in the Help & How-To Center are no longer applicable, due to the discontinuation of Creative Solutions Accounting.

Payroll CS requires that specific information be entered in the setup record for the Federal Garnishment deduction item due to the following limits:

Payroll CS supports the application of both of the above limits for garnishments that are either a fixed amount per check or a percent of disposable wages. If a garnishment is to be calculated as an amount per hours worked, a percentage of gross wages, or a percentage of net pay, only the 30 x Minimum Wage x Number of Weeks Worked minimum amount assurance can be applied.

To apply the 30 x Minimum Wage x Number of Weeks Worked assurance

  1. Choose Setup > System Configuration > Deduction items, select the Federal Garnishment deduction item, and then click the Calculations tab.
  2. Make sure that the Federal garnishment checkbox is marked. This will cause the annualized amount of the deduction to be limited to the Federal garnishment threshold entered in the Federal Tax Information dialog (Setup > System Configuration > Payroll Tax Information > Federal).

    Note: The Federal Garnishment Threshold should be 30 x Minimum Wage x 52 weeks, so that 30 x Min Wage x Number of Weeks worked will remain available.

  3. Select After-tax income percentage from the Calculation type drop-down list.
  4. Click Enter to save your entries and then click Done to close the Deduction items dialog.
  5. Click Setup > Employees, select the employee for whom you are adding the deduction, and then click the Edit button.
  6. Click the Item Properties button for the Federal Garnishment item to open the Deduction Item Properties dialog.
  7. If a garnishment amount is to be calculated as a percentage of disposable wages, enter either the percentage of the deduction specified on the garnishment order or the maximum percentage allowed for that type of deduction into the Percent field. Contact the IRS for further information about maximum allowable percentages.
  8. If a garnishment is a fixed amount per check, enter the maximum percentage into the Percent field, and then click the Deduction Limits tab. In the Maximum amount per check field, enter the fixed amount of the deduction. This will cause the lesser of the maximum percentage or the fixed amount to be calculated.

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Related topics

Federal garnishment setup and calculations

Payroll Tax Information > Federal Tax Information dialog

Deduction Items [Setup menu, System Configuration]

Employees. . . Deduction Item Properties

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