Nebraska Wage Garnishment Checklist
Wage garnishment is a legal process that the Nebraska Department of Revenue uses to collect unpaid state income taxes directly from your paycheck. If you receive a notice of levy for wage garnishment, the state has determined that you owe back taxes and is taking action to recover that debt through your employer.
This enforcement action means the state has moved beyond sending notices and is now collecting money before it reaches your bank account. Ignoring a notice of levy will not stop the process because your employer is legally required to comply with the state’s order.
What This Issue Means
A notice of levy from Nebraska’s Department of Revenue is a formal order directing your employer to withhold a portion of your paycheck and send it to the state. This notice means the state has determined you owe unpaid state income taxes and has decided to collect directly from your wages.
Why the State Issued This or Requires This
Nebraska’s Department of Revenue issues a notice of levy after earlier attempts to collect have not resulted in payment. Common triggers include unpaid state income taxes from prior tax years, failure to respond to previous collection notices, or non-payment following a tax assessment.
The state uses wage garnishment as a collection tool when other methods have not been successful. According to Nebraska Revenue Regulations Chapter 36, the Department may issue a notice of levy if you are delinquent in paying Nebraska taxes, you have not shown satisfactory cooperation, and a demand for payment has been sent within the last sixty days.
What Happens If This Is Ignored
Nebraska regulations specify that the notice of levy is continuing and will be released only when the amount is paid in full, the Department voluntarily releases the levy, or you file a bankruptcy petition and come under the protection of the United States Bankruptcy Court. Your employer will begin withholding money from your paycheck according to the state’s order if you do not
respond to the notice of levy, and this income withholding continues until the state tax lien is satisfied or the levy is officially released.
What This Does NOT Mean
Receiving a notice of levy does not mean you have been arrested or that criminal charges have been filed against you. The notice does not automatically mean your bank account has been frozen, that property seizure actions have been initiated, or that additional collection actions are currently happening.
Checklist: What to Do After Receiving a Notice of Levy
Follow these steps to understand your situation and respond appropriately
1. Read the entire notice of levy carefully and identify the tax year or years involved, the amount claimed as owed, and the effective date of the levy.
2. Verify the notice is addressed to you by confirming your name, address, and Social
Security number match your records.
3. Check the notice for a contact phone number or department name because the notice should identify which Nebraska state agency issued it.
4. Gather copies of your prior tax returns and payment records for the year or years listed in the notice, including any balance due notice you may have received before the levy was issued.
5. Locate any previous collection notices or correspondence from Nebraska’s Department of Revenue related to this tax debt and delinquent tax account.
6. Review your paycheck stub after the notice effective date and confirm whether the garnishment has begun, identify the amount being withheld from your disposable earnings, and determine whether the income withholding calculation follows Nebraska garnishment laws.
7. Document the garnishment amount on each paycheck going forward for your records because you will need this information if you contact the state or dispute the amount.
8. Contact Nebraska’s Department of Revenue using the phone number or mailing address listed on the notice to ask clarifying questions about the debt, the levy, and whether the state has recorded a tax lien against your rights to property.
9. Ask the Department of Revenue whether payment agreements, installment agreements, or other collection alternatives are available and request information about any formal processes to dispute the amount or explore options.
10. Understand that you have twenty days from service of the notice of levy to request in writing a determination that the levy is not valid against your interest in the property, and the Department must respond within ten days of receiving your request.
11. Keep all notices, pay stubs, and correspondence in one organized file for future reference because you may need these documents if you appeal the levy or negotiate a resolution.
What Happens After This Is Completed
After you contact Nebraska’s Department of Revenue or receive confirmation of the garnishment, the state will continue collecting from your wages according to the notice of levy.
The Department of Revenue will track payments applied to the outstanding tax debt and may provide information about the remaining balance or payment progress.
If the state has already recorded a state tax lien with the Secretary of State, the lien will remain in effect until the debt is satisfied. Additional collection procedures, such as levies on bank accounts or issuance of a writ of seizure against personal property, may occur if the wage garnishment does not resolve the debt.
Common Mistakes to Avoid
Several common errors can complicate a wage garnishment situation
- Ignoring the notice and hoping the garnishment will stop on its own allows the state to
continue withholding indefinitely because the levy remains in effect until officially released.
- Not contacting your employer to confirm they received the state's notice of levy creates
confusion because your employer is required to comply, and you need to verify they
have the correct information about income withholding from your disposable earnings.
- Failing to save pay stubs showing the garnishment amounts eliminates your ability to
track payments accurately for any future disputes or negotiations with the Department of
Revenue.
- Assuming the notice is a mistake without verifying the underlying tax assessment wastes
time because you should contact the state to confirm the tax year and amount before deciding the notice is incorrect.
- Not asking about payment agreements or installment payment options means you may
miss opportunities because the state may offer alternatives to continued wage garnishment if you reach out promptly to discuss resolution options.
- Missing the twenty-day deadline to request a determination that the levy is not valid
eliminates your administrative appeal rights under Nebraska regulations and allows collection to continue without review.
- Failing to inquire about exemptions from levy for certain types of income or property can
result in unnecessary hardship because Nebraska Revised Statutes and collection procedures recognize specific protections that may apply to your situation, particularly if you qualify as head of a family under garnishment laws.
- Not asking whether the state has recorded a tax lien against your property can leave you
unprepared for additional enforcement actions beyond wage garnishment.
Frequently Asked Questions
How much of my paycheck can be garnished for state tax debt?
Nebraska Revised Statutes Section 25-1558 specifies garnishment limits for most debts, but subsection two creates an exception for state and federal tax debts. The normal restrictions on wage garnishment do not apply to debts due for any state or federal tax, which means the percentage of disposable earnings subject to garnishment for tax debt is not limited by the standard head of a family protections that apply to other creditors.
Can I request a hearing or appeal the garnishment?
Nebraska regulations provide that you may request in writing a determination that a notice of levy is not valid against your interest in the property within twenty days after service of the notice. You may appeal the decision under the Administrative Procedure Act if you disagree with the determination.
What is the difference between a tax lien and a wage levy?
A tax lien is a legal claim against your rights to property, including real property and personal property, which secures the state’s interest in collecting the tax debt. A state tax lien can be recorded with the Secretary of State and becomes a public record that may affect your ability to sell or refinance property. A wage levy, by contrast, is an active collection procedure that directs your employer to withhold money from your disposable earnings and send it directly to the state.
Can the state take money from my bank accounts in addition to garnishing my wages?
The state has authority under collection procedures to levy bank accounts separately from wage garnishment. If you have received a balance due notice or a notice of levy for wages, the
Department may also issue levies against bank accounts or other financial assets if the wage garnishment does not satisfy the debt promptly.
Can I set up Payment Agreements or Installment Agreements to stop the garnishment?
The Department of Revenue may enter into payment agreements or installment agreements with taxpayers who cannot pay the full amount immediately. Installment payment plans allow you to resolve the debt over time and potentially stop or reduce the wage garnishment. Contact the Department to discuss whether payment agreements or installment agreements are available based on your financial situation and the amount owed.
Moving Forward After a Notice of Levy
Receiving a notice of levy is serious, but understanding what it means and taking clear steps to respond can help you manage the situation effectively. Contacting the Department of Revenue to understand the debt, confirm the amount, explore payment options, and inquire about exemptions from levy is an important first step.
Keep organized records of all notices, pay stubs showing income withholding, and correspondence related to the tax lien or levy to support any appeals or negotiations with the state.
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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