Kentucky Wage Garnishment Checklist

Kentucky Wage Garnishment Checklist

Kentucky wage garnishment is a legal collection action the state uses to collect unpaid state income taxes directly from your paycheck. When the Kentucky Department of

Revenue determines you owe back taxes and other collection methods have not resolved the debt, they may issue an order of wage garnishment to your employer. This order requires your employer to withhold a portion of your disposable earnings and send that money to the state until the debt is satisfied or another arrangement is made.

Wage garnishment is a significant enforcement tool that affects your take-home pay immediately. Understanding what this means, what triggers it, and what steps follow can help you respond appropriately and explore available options. Ignoring a wage garnishment order does not stop the process and typically results in continued wage withholding until the debt is resolved or the state takes additional action.

What This Issue Means

A wage garnishment order is a formal legal document issued by the Kentucky

Department of Revenue directing your employer to deduct money from your paycheck for unpaid state taxes. Once your employer receives this order, they are legally required to comply. The garnishment remains in effect until the state releases it, which typically happens when your tax debt is paid in full or a settlement is reached.

Your employer cannot ignore this order, and they cannot penalize you for receiving one.

Kentucky laws protect employees from employer retaliation related to wage garnishment for taxes. The withheld funds go directly to the state to satisfy your outstanding tax liability.

Why the State Issued This or Requires This

The Kentucky Department of Revenue issues wage garnishment orders when a taxpayer has unpaid income taxes and previous collection efforts have not resulted in payment. These prior efforts typically include bills, notices, payment demands, and other collection letters. Wage garnishment is one of several enforcement tools the state uses under Kentucky Revised Statutes to ensure compliance and collect delinquent revenue.

The state typically pursues garnishment when the debt remains unpaid after a specific period or when the taxpayer has not responded to earlier notices. Kentucky's garnishment process is part of the state's standard collection procedures for resolving

delinquent tax accounts. The state uses this method to secure payment while allowing the taxpayer to continue working.

What Happens If This Is Ignored

If you receive a wage garnishment order and take no action, your employer will begin withholding the amount specified in the order from each paycheck. The garnishment will continue with each subsequent pay period until the state releases the order. During this time, your take-home pay will be reduced by the garnishment amount, affecting your disposable income available for living expenses.

If you believe the debt is incorrect, have experienced a significant change in circumstances, or wish to discuss payment options, contacting the Kentucky

Department of Revenue is typically the first step toward addressing the garnishment.

Without communication or resolution, the garnishment will remain active, and other collection actions may follow. Taking early action provides more options for resolution than waiting.

What This Does NOT Mean

Receiving a wage garnishment order does not mean you are being criminally prosecuted or that criminal charges will be filed against you. Tax collection is a civil matter, not a criminal one, in most circumstances. The garnishment does not mean your employer can fire you, reduce your hours, or treat you differently because of the order;

Kentucky laws prohibit employer retaliation for tax garnishment.

The garnishment does not automatically mean the state has seized your bank accounts, home, or other assets; however, additional collection actions may be taken if the debt remains unresolved. A wage garnishment order is a civil debt collection tool designed to recover unpaid taxes while allowing you to continue earning income. This is different from garnishment by judgment creditors seeking to collect consumer debt or credit card bills through a court judgment.

Checklist: What to Do After Receiving a Wage

Garnishment Order

Follow these steps to understand the order and explore your options.

Step One: Locate and Review the Garnishment Order

Find the original wage garnishment order document. Check that your name, Social

Security number or tax identification number, and employer information are correct.

Note the amount being garnished from each paycheck and identify any deadline or contact information provided on the order. Verify that the order references the correct tax years or periods for the unpaid income taxes.

Step Two: Verify Your Tax Account with the Kentucky Department of

Revenue

Contact the Kentucky Department of Revenue at the phone number listed on the garnishment order or your previous tax notices. Provide your name and tax identification number. Request a current account balance and confirmation of the tax debt amount.

Ask for a summary of what years or tax periods the debt covers. Note the name of the representative you spoke with and the date of the call for your records. This verification step helps ensure you understand the full amount owed.

Step Three: Review Your Tax Records

Gather your prior-year tax returns for the years in question. Compare the debt claimed by the state to your filed returns and any regular payments you made. Look for any discrepancies, such as credits you believe you were entitled to or payments you made that may not have been recorded correctly.

Organize these documents in chronological order. If you find evidence of payment or errors in the state's records, prepare to present this information to the Department of

Revenue.

Step Four: Check Your Employer's Payroll Records

Request a pay stub from your employer showing the garnishment amount deducted from your disposable earnings. Confirm that the garnishment is being withheld correctly as stated in the order. Keep copies of all pay stubs that reflect the garnishment for your records.

Report any calculation errors to your employer immediately. Employers are required to follow the order as written, but may make mistakes in implementation. The garnishment should not exceed the limits on wage garnishments established under federal and state law.

Step Five: Contact the Kentucky Department of Revenue's Collections

Division

Call the Kentucky Department of Revenue collections unit. Explain that you have received a wage garnishment order and want to discuss the debt. Ask about available

options, such as payment plans, installment agreements, or other resolution methods, to address the overdue taxes.

Request written information about any programs or options the state offers. Ask whether you can request a hearing or appeal if you dispute the debt amount or believe an error has occurred.

Step Six: Consider Filing an Exemption Claim

If you believe certain income should be protected from garnishment, ask about filing an exemption claim. Some types of income, such as Social Security benefits or pension benefits, may be exempt from wage garnishment under federal law. The exemption claim form process varies depending on the type of income and your circumstances.

Contact the Kentucky Department of Revenue or consult the clerk of the court to understand what exemptions may apply to your situation. Filing an exemption claim does not automatically stop the garnishment, but it may provide relief if approved.

Step Seven: Document All Communications

Keep a record of every phone call, email, or letter you send to the state. Write down the date, time, name of the person you spoke with, and the substance of the conversation.

Keep copies of any letters you send and the responses you receive.

Save all emails related to your tax debt and the garnishment. This documentation may prove valuable if disputes arise or if you need to verify agreements made with the state.

Step Eight: Respond to Any Notices or Requests from the State

If you receive additional notices, read them carefully and respond by any deadline stated. Do not ignore follow-up correspondence. If the state requests financial information or documentation, gather it promptly.

Missing deadlines can eliminate your ability to challenge the garnishment or qualify for specific relief options. Timely responses demonstrate your willingness to cooperate and resolve the matter.

Step Nine: Explore Available Payment Options

Ask the Kentucky Department of Revenue whether you qualify for an installment payment plan. Inquire about any hardship provisions or temporary relief options if the garnishment creates severe financial difficulty. Request information about any dispute or appeal procedures if you believe the debt is incorrect.

Ask whether debt relief programs, such as an Offer in Compromise or settlement options, are available. The state may have programs that allow you to resolve the debt for less than the full amount under certain circumstances.

Step Ten: Understand How This Differs from Other Garnishments

State tax garnishment differs from other types of wage garnishment, such as those for child support, student loans, or court judgments, issued by judgment creditors. Different rules under the Consumer Credit Protection Act govern federal student loan garnishments and child support payments. Administrative garnishment by the federal government for unpaid judgment awards or federal income tax also operates under separate guidelines.

Understanding these distinctions helps you recognize that Kentucky Revised Statutes and state procedures govern state tax garnishment. The federal minimum wage calculation used to protect a portion of disposable earnings applies to most garnishments, but tax levies may have different limits.

What Happens After This Is Completed

After you have gathered your information and contacted the Kentucky Department of

Revenue, the state will typically review your account and discuss your situation with you. If you agree to a payment plan or other arrangement, the state generally issues documentation confirming those terms. In some cases, the state may suspend or release the garnishment if you demonstrate a commitment to resolve the debt through an agreed-upon payment arrangement.

If the debt remains unpaid and no arrangement is made, the garnishment typically continues. The state may also provide information about upcoming steps or additional collection actions if the debt is not resolved within a specified timeframe. Maintaining communication with the state throughout the process is essential to finding a workable solution.

Common Mistakes to Avoid

Ignoring the garnishment order: Assuming it will go away or that you can address it later allows the garnishment to continue and may trigger additional collection actions.

Not verifying the debt amount: Failing to confirm the balance owed means you may pay more than necessary or may miss errors in the state's records.

Missing deadlines: If the state provides a deadline to respond, contest, or appeal, missing that date typically eliminates your ability to challenge the garnishment.

Not contacting the state: Many taxpayers receive garnishment orders but never call the state to discuss options. This eliminates the possibility of resolving the debt through a payment arrangement or debt relief program.

Providing incomplete information: If the state requests financial information or documentation to support a hardship claim or payment plan request, sending incomplete information delays resolution.

Changing jobs without notice: If you change employers, the garnishment order typically follows you to the new employer. Informing the state of any address or employment changes helps ensure documents reach you.

Assuming the garnishment is permanent: Garnishments remain in effect until the state releases them, but they are not permanent if you take steps to resolve the debt.

Frequently Asked Questions

Can my employer fire me because of a wage garnishment?

No. Kentucky laws prohibit employers from terminating, disciplining, or treating an employee differently because of a wage garnishment for taxes.

How much of my paycheck can the state take?

The amount varies depending on the garnishment order issued. The order itself specifies the amount or percentage to be withheld from your disposable earnings each pay period. Review your garnishment order or contact the Kentucky Department of

Revenue to confirm the exact amount.

Can I stop the garnishment?

The garnishment stops when the state releases it, which typically happens when your tax debt is paid in full or when you reach a settlement or payment plan with the state.

Contact the Kentucky Department of Revenue collections division to explore your options.

What if I believe the debt is wrong?

Contact the Kentucky Department of Revenue and explain your concern. Ask about procedures for disputing or verifying the debt. If you disagree with the state's determination, ask whether you can request a hearing or appeal.

Will the garnishment affect my credit?

The state tax debt itself may appear on your credit report as a tax lien, but the garnishment order itself is not typically reported to credit bureaus. However, continued delinquent tax debt can impact your credit standing.

What happens if I change jobs?

The garnishment order typically follows you to a new employer. The state will issue a new garnishment order to your new employer if your debt remains unpaid. Inform the state of any address or employment changes to ensure documents reach you.

How long will the garnishment last?

The garnishment remains in effect until the state releases it, which occurs when your debt is resolved. The length of time depends on the debt amount and whether it is resolved through payment or settlement.

Is this the same as garnishment for child support or student loans?

No. Kentucky Revised Statutes govern state tax garnishment and are different from child support payments, federal student loan garnishment, or garnishment by judgment creditors collecting consumer debt. Each type of garnishment follows different rules and procedures.

Facing State Tax Enforcement Action?

If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.