Setting up child support garnishments

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Our Support department is closed on Friday, April 28th for a company event. However, limited Accounting CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline for quarterly payroll tax forms.

Links to our most popular payroll tax processing topics are available in the Alerts and notices section on the right side of most pages.

Verifying the client's medical support status (for the ACH addenda record)

This task applies only to clients with employees who make direct deposit child support payments.

When child support payments are made via direct deposit, the ACH file includes the payment information along with the appropriate addenda record details. One of the required fields in that addenda record is the Medical Support Indicator field, which is used to specify whether or not the client offers a health care plan to the employee. To ensure that the addenda record is correct, follow these steps.

  1. Choose Setup > Clients and select the appropriate client.
  2. If the client offers a health care plan to its employees, click the Payroll Information tab and mark the Offers health care plan checkbox in the Miscellaneous Information section.

    Note: If you mark the checkbox for a client, the application will place a Y in the Medical Support Indicator field of the addenda record when the child support payment is made via ACH. If you do  not mark the checkbox, the application will place an N in that field.

  3. Click Enter to save the information.

See also:

Adding a direct deposit bank account

Adding direct deposit information for vendors or agents

Garnishment overview

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Setting up a vendor as payroll agent for direct deposit child support deductions

You will need to set up a payroll agent vendor for the deductions, if one is not already set up.

  1. Choose Setup > Vendors and click the Add button. If this is an existing vendor, click the Edit button.
  2. Enter the vendor information as usual.
  3. In the Identification section of the Main tab, the vendor type must be Payroll Agent.
  4. In the Payment Preferences section of the Main tab, the payment method must be Direct Deposit.
  5. In the Direct Deposit tab, enter valid direct deposit information for the vendor and then click Enter to save your changes.

Adding a child support payroll item for the client

Enter the child support payroll item in the same manner as you would any payroll item (see Creating and adding payroll items for your client). The following procedure highlights the steps specific to setting up child support payroll items.

  1. Choose Setup > Payroll Items and select the appropriate client record in the client selection field, if it's not already selected.
  2. In the Identification section, enter the description for the child support deduction item, choose Deduction as the payroll item type.

    We recommend that you do not enter an agent in this section. You will select the appropriate agents when you add child support information for the employee.

  3. In the Special Type section, choose the Garnishment option and select Child support from the drop-down list.
    Special type Child Support
  4. Continue adding the payroll item as usual, and click the Enter button to save the child support payroll item.

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Adding child support information for the employee

  1. Choose Setup > Employees, select the client and highlight the appropriate employee in the Employees list.
  2. In the Deductions grid of the Payroll Items tab, mark the Active checkbox next to the child support payroll item and click the Ellipsis Ellipsis button button to open the Employee Payroll Item Settings dialog for this item.
  3. Certain sections are grayed out and can be modified only at the client payroll item level. Modify the fields in other sections for this employee as needed.
  4. In the Child Support Orders section, enter all of the child support orders for this employee in the grid. Orders for various amounts and states can be entered here using this single deduction item.

    Note:

    • In the Agent column, select the payroll agent vendor that was set up for the child support deduction. Only vendors set up as Payroll Agent type will show up in the drop-down list.
    • The default maximum percentage of disposable income is set to 60%. Marking the In Arrear checkbox or the This employee supports a second family checkbox changes this default maximum percentage. For more details, refer to the Garnishment overview.
    • The case information that you enter into the grid (Case identifier, date, state, agent, etc.) will appear in the addenda record for the ACH file that is created when the vendor check with the liability is printed. This identifies the court case to which the direct deposit amount should be applied.
    • When you enter the state and county for the child support order, the application automatically generates the appropriate FIPS code within the addenda record for the ACH file.
    • When there are multiple orders, enter them in the grid, specifying the amount for each in the Amount column. If there is not enough disposable income to cover the amounts, Accounting CS will prorate the garnishment amounts using the ratio of each order amount compared to the total disposable income amount.
    Child Support Orders grid
  5. Click OK to save the payroll item settings.

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Adding child support details to vendor check layouts

To add child support detail variables such as the case identifier, FIPS Code, Order Date, etc., to vendor check layouts, follow the steps below.

  1. Choose File > Layout Designer and open the check layout.
  2. Choose Insert > Region > Repeating Region.
  3. Left-click the location on the layout on which you want the child support details to print, and drag across the desired location to create the repeating region.
  4. Choose Insert > Variable.
  5. In the Variables tree, expand the Vendor Activity > Check > Liability Details > Child Support Details group.
  6. Left-click the variable that you want to insert and drag it to the desired location within the repeating region.

For more information about defining text and data variables on your vendor checks, see the Layout Designer procedures.

Limits

Limits are restricted by the Consumer Credit Protection Act (CCPA)

Use the In Arrears checkbox and the This employee supports a second family checkbox in the Employee Payroll Item Settings dialog to specify if the default limits should be changed for those reasons.

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