Maryland Wage Garnishment Checklist
Understanding State Tax Enforcement Through Wage
Liens
A wage lien is an administrative collection action that Maryland’s Comptroller may use to collect unpaid state income taxes directly from your paycheck. Unlike court-ordered wage garnishments that require judgments from a judgment creditor against a judgment debtor, the
Comptroller has statutory authority under Maryland Tax-General Code Section 13-811 to impose wage liens administratively without obtaining a court order under Maryland law.
What This Issue Means
An administrative wage lien issued by Maryland’s Comptroller directs your employer to withhold money from your paycheck and send it to the state to satisfy unpaid tax debt. Your employer receives formal notice requiring compliance with this withholding, and deductions begin immediately within the first payroll period after service of the notice. This administrative action carries the same legal force as a court-issued judgment lien but does not require judicial authorization through the garnishment process to initiate.
Why the State Issued This Action
Maryland’s Comptroller initiates wage liens when taxpayers have outstanding state and federal tax debts, and prior collection attempts have not resolved the obligation. The Comptroller uses this administrative collection tool, authorized under the Maryland Code, to recover money owed to the state. Common situations triggering wage liens include unpaid income taxes from prior years, failure to respond to debt collection notices, or nonpayment under existing payment arrangements established with the agency.
What Happens If This Is Ignored
If a wage lien is already in place and you take no action to address the underlying tax debt, the withholding will continue until the debt is paid in full. The amount withheld is calculated under
Maryland Commercial Law Section 15-601.1, which exempts from collection the greater of 75% of disposable earnings or 30 times the Maryland minimum wage multiplied by the number of weeks the wages cover. Ignoring the lien means missing opportunities to request modifications or discuss alternative payment arrangements with the Comptroller’s Office.
What This Does Not Mean
A wage lien does not mean you face criminal prosecution or potential incarceration. Unpaid taxes are civil matters, and wage liens are collection tools rather than criminal penalties. This action does not mean your employer can stop the withholding voluntarily or that paying your employer resolves the state’s claim. Your employer must continue withholding until the
Comptroller issues a formal notice of satisfaction or release under Tax-General Code Section
13-811(f) following the legal procedure.
How Wage Liens Differ From Other Garnishments
Understanding the distinctions between state tax wage liens and other wage garnishment methods helps clarify your rights and options. Maryland Wage Garnishment Laws under
Maryland Rules Title 3 govern standard court-ordered garnishments, while administrative tax liens follow different procedures. The Consumer Credit Protection Act and federal law establish maximum garnishment limits to protect employees from excessive wage withholding across all garnishment types.
Types of Wage Withholding Under Maryland Law
State tax wage liens: The Comptroller imposes these administrative liens without court orders under Maryland Tax-General Code Section 13-811, and they take priority over most other creditor claims. These liens attach to garnished wages immediately upon employer notification and continue until formal release.
Court-ordered wage garnishments: Judgment creditors must obtain court judgments and follow Maryland Rules procedures to garnish wages for debts, including credit card bills, personal loans, and medical bills. The garnishment process requires filing a Request for
Garnishment and serving a Writ of Garnishment on the employer.
Child support withholding: Child support obligations receive priority under both federal law and Maryland law, allowing withholding of up to fifty to sixty-five percent of disposable earnings, depending on arrearages. These withholdings take precedence over general creditor garnishments but may run concurrently with federal tax levies.
Federal student loans and defaulted student loans: The Internal Revenue Service and federal agencies can administratively garnish wages for defaulted student loans without court orders, similar to state tax liens. Federal benefits and certain exempt amounts remain protected under the federal Consumer Credit Protection Act.
Step-by-Step Checklist After Receiving This Notice
Step 1: Gather All Notices and Documentation
Collect the wage lien notice from your employer and any notices sent directly to you by
Maryland’s Comptroller. Keep these legal documents organized for reference, and review them
carefully to identify the amount owed, the tax years involved, and the Comptroller contact information provided.
Step 2: Verify the Tax Debt Accuracy
Confirm the tax debt listed belongs to you and not another individual with similar identifying information. Check the Social Security number, name spelling, and tax years mentioned on all notices. Document any discrepancies you identify for discussion with the Comptroller’s
Collection Division using proper legal terms.
Step 3: Review Your Pay Stubs and Bank Account
Examine your pay stubs to verify that the withholding amounts match the exempt amount calculations under Maryland Commercial Law Section 15-601.1. Check your bank account to ensure you maintain sufficient funds for essential expenses. Calculate whether the garnished wages leave you with the protected minimum income.
Step 4: Contact Maryland’s Comptroller Collection Division
Reach out to the Collection Division customer service to discuss your account status and the wage lien. Request your current balance owed, confirm the tax years and the reason for the debt, and ask about available resolution options. Document the representative’s name, date, and discussion details for your records.
Step 5: Inquire About Payment Plan Options
Ask whether you can establish an installment agreement instead of continuing wage withholding. Request information about required monthly payment reports, any associated fees or conditions, and whether establishing a payment plan would result in lien modification. Obtain written confirmation of any payment arrangement terms before proceeding.
Step 6: Discuss Wage Lien Modification Possibilities
If the wage lien creates genuine financial hardship affecting medical insurance payments or essential expenses, ask the Comptroller whether you can request modification of the withholding amount. Understand what financial documentation or information you would need to provide to support your request. Clarify that Maryland does not have formal hardship procedures comparable to federal tax collection alternatives.
Step 7: Understand Your Appeal Rights
If you dispute the underlying tax assessment, you have thirty days from the assessment notice date to file an appeal with the Comptroller’s Hearings and Appeals Division. Ask about the appeal process, required documentation, and applicable deadlines. Understand that late appeals do not entitle you to a hearing under Maryland Rules, though you may submit documents for administrative review.
Step 8: Consider Consulting Legal Representation
If your situation involves complex issues or you need guidance navigating the legal system, consider consulting bankruptcy or debt relief attorneys familiar with Maryland Department of
Labor regulations. Legal representation can help you understand options, including Chapter 7 or
Chapter 13 bankruptcy, which may provide relief through an automatic stay that temporarily halts collection actions.
Step 9: Document All Communications in Writing
Send written correspondence to the Comptroller summarizing your conversations, questions asked, and any commitments made during discussions. Keep copies of all sent correspondence and request written confirmation of information provided. Written documentation protects you and creates clear records of your collection account activity.
- Missing appeal deadlines: Failing to file an appeal within thirty days of an assessment
- Not documenting payments made: Without payment documentation, you may struggle
- Ignoring multiple collection notices: When you receive numerous notices or collection
- Relying solely on verbal agreements: Phone conversations with Comptroller staff may
- Assuming automatic lien release: A wage lien will not automatically stop if you ignore
- Failing to protect exempt income: Not understanding which income sources remain
- State tax notice review and response
- Penalty and interest reduction options
- Payroll and trust fund tax assistance
- Payment plan and relief eligibility review
- Representation with state tax agencies
Step 10: Track Payments and Maintain Records
Keep detailed records of all payments made toward your tax debt, including payment dates, amounts, and confirmation receipts. Document all communications with the Comptroller’s Office, including phone calls with notes, emails exchanged, and letters sent. Organized records help resolve disputes and verify when debts are satisfied.
What Happens After Completing These Steps
After contacting the Comptroller and providing the requested information, the state will review your account and respond regarding your balance, payment options, or next steps. If you establish a payment plan, discuss with the Comptroller whether and when they will issue a notice of satisfaction or release to your employer. If you request a hearing on a disputed assessment, the Hearings and Appeals Division will schedule a telephonic hearing within forty-five days of your timely appeal.
Understanding Bankruptcy Options for Tax Debts
A bankruptcy filing may provide relief from wage liens in certain circumstances, though state and federal taxes receive priority under bankruptcy law. Chapter 7 bankruptcy may discharge qualifying older tax debts that meet specific criteria, while Chapter 13 bankruptcy allows repayment of tax debts over three to five years. The automatic stay that begins upon court filing temporarily halts most collection actions, including wage liens, providing breathing room to address your financial situation.
Chapter 7 Bankruptcy Considerations
Chapter 7 bankruptcy may discharge certain income tax debts that are at least three years old and meet other specific requirements under federal law. The automatic stay temporarily stops wage liens, but the Comptroller may request relief from the stay for priority tax claims. Consult
bankruptcy attorneys to determine whether your tax debts qualify for discharge or whether other options better suit your circumstances.
Chapter 13 Bankruptcy Benefits
Chapter 13 bankruptcy allows you to repay state tax debts through a court-approved payment plan over three to five years while stopping wage liens through the automatic stay. This option works well for taxpayers with regular income who need time to repay debts without ongoing wage withholding. Priority tax debts must be paid in full through the Chapter 13 plan under section 547 of the bankruptcy code.
Common Mistakes to Avoid notice means losing your right to a hearing and the ability to challenge the underlying tax debt through the administrative process. Late appeals receive only document review without hearings or further appeal rights under Maryland Rules. to prove payment if disputes arise about amounts owed or whether the debt has been satisfied. Keep all payment confirmations, bank statements, and correspondence showing amounts paid and dates. letters, ignoring them means missing important deadlines and opportunities to discuss your situation with the Comptroller before more serious collection actions escalate.
Respond promptly to all legal documents received. lead to misunderstandings about agreed-upon terms or expected outcomes. Always request written confirmation of payment plans, lien modifications, or other arrangements discussed through customer service or long-distance telephone calls. it or make informal arrangements without formal Comptroller approval. The lien continues until the debt is paid in full or until you establish and comply with an approved payment arrangement that results in a formal lien release. protected under federal benefits exemptions and Maryland law may result in unnecessary financial hardship. Review the bank account exemption rules and disposable earnings calculations to ensure compliance with legal protections.
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