California Wage Garnishment Checklist
Wage garnishment is a legal process California uses to collect unpaid state taxes directly from your paycheck. The Franchise Tax Board issues an earnings withholding order for taxes to your employer when you owe state income taxes.
What This Issue Means
An earnings withholding order for taxes is an administrative order that the Franchise Tax Board sends directly to your employer, requiring them to withhold a specific amount from your paycheck and send it to the state to pay your tax debt. Once your employer receives the order, they are legally required to follow it, and money will be withheld from your paycheck each pay period until the debt is paid or the garnishment is lifted.
Why the State Issued This or Requires This
California issues earnings withholding orders when a taxpayer owes state income tax and the
Franchise Tax Board exercises its administrative collection authority. Common triggers include unfiled tax returns, unpaid taxes from previous years, or unpaid assessments after audits, and the FTB has discretion in choosing collection methods without being legally required to attempt liens or demand letters before issuing a wage garnishment.
What Happens If This Is Ignored
Your employer will continue withholding money from your paycheck according to the order’s terms if you ignore an earnings withholding order for taxes. The garnishment will remain in place until the underlying tax debt is fully paid or you take action to address it.
What This Does NOT Mean
Receiving an earnings withholding order for taxes does not mean you are being prosecuted criminally or facing jail time for owing taxes. Your entire paycheck will not be taken, as the FTB can collect up to 25% of disposable earnings per pay period, which exceeds the standard
California garnishment limit of 20% for most other debts.
Checklist: What to Do After Receiving an Earnings
Withholding Order
Step 1: Verify the notice and identify the issuing agency
1. Review the FTB 2905 form carefully to confirm it is addressed to you and contains your correct information.
2. Identify the Franchise Tax Board as the issuing agency for personal income tax debts.
3. Note the tax year or period the debt relates to.
4. Confirm your employer’s name and that they received the same order.
5. Check the order for a case number, contact information, and any deadlines listed.
Step 2: Understand the garnishment details
1. Locate the withholding amount per paycheck on the order, which can be up to 25% of your disposable earnings.
2. Identify the total debt amount owed, if stated in the notice.
3. Review any information about how long the garnishment will remain in place.
4. Note whether the order includes instructions for the employer.
5. Check if any information about your rights or next steps is included in the document.
Step 3: Gather documentation related to your tax debt
1. Locate any previous notices, letters, or bills from the state regarding this tax debt.
2. Collect copies of tax returns you filed for the relevant year or years.
3. Gather records of any payments made toward this debt.
4. Find documentation of any correspondence with the Franchise Tax Board.
5. Organize pay stubs, income records, or other documents related to your income for the tax year in question.
Step 4: Contact the Franchise Tax Board
1. Locate the phone number and mailing address on the earnings withholding order for taxes.
2. Call the FTB to ask about the debt and the garnishment.
3. Ask for an explanation of what you owe and how the amount was calculated.
4. Inquire whether the debt can be addressed without continuing the garnishment.
5. Request written information about payment plan options, if available.
Step 5: Determine if you dispute the debt
Review the original tax debt and assess whether you believe it is correct. Compare what you reported on your tax return to what the state says you owe if you filed a return for that year.
Step 6: Request written documentation of the debt
Ask the Franchise Tax Board in writing for a detailed breakdown of your tax debt. Request information about penalties and interest included in the amount owed, and keep copies of all correspondence for your records.
Step 7: Explore payment options
1. Ask the agency whether you can make a lump-sum payment to release the garnishment.
2. Inquire about installment agreement options if available.
3. Ask what documentation is needed to set up a payment arrangement.
4. Request information about any fees associated with payment plans.
5. Understand that garnishment release is discretionary and depends on factors including payment amount and compliance history.
Step 8: Monitor your paychecks and document deductions
1. Review each paycheck to confirm the garnishment amount matches the order.
2. Keep records of all garnishment deductions taken.
3. Note any changes in the withholding amount.
4. Report any discrepancies to your employer and the issuing agency immediately.
5. Maintain pay stubs for at least three years.
Step 9: Follow up on your request
Follow up within the timeframe specified by the agency if you submitted a payment arrangement request. Track the status of your appeal if you filed a protest, and keep records of all phone calls, including the date, time, and person spoken to.
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
Step 10: Seek clarification on your rights
Ask the agency whether you have protections under California law regarding garnishment limits.
Inquire about your right to a hearing or appeal process, and clarify what options exist if you experience financial hardship.
What Happens After This Is Completed
The agency will typically review your case to determine the next steps after you contact the state and provide information about your situation. Setting up an installment agreement with the
FTB does not automatically release a wage garnishment, as release is discretionary and depends on factors including payment amount and compliance history.
Moving Forward
Receiving an earnings withholding order for taxes is stressful, but it is an opportunity to take action and address your tax debt. Understanding what the FTB 2905 form means, what your options are, and what steps to take next puts you in a stronger position to resolve the issue.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
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