Wage garnishment is a legal process in which part of a person’s paycheck is withheld by an employer to satisfy a debt. In New Hampshire, this often happens when unpaid taxes are owed to the federal government or the New Hampshire Department of Revenue Administration (NH DRA). For taxpayers, money can be taken directly from their wages before they even receive a paycheck, reducing their take-home pay and adding financial stress.
Regarding tax debt, wage garnishment can be initiated by federal agencies like the Internal Revenue Service (IRS) or state authorities under New Hampshire law. Each has its rules, forms, and procedures, but the result is the same: your income is garnished pursuant to a garnishment order until the debt is paid or resolved. Understanding how this system works is essential for protecting your paycheck, planning your budget, and knowing what options exist to stop or reduce garnishment.
This guide provides general information to help you understand wage garnishment in New Hampshire. We’ll explain to the governing authorities what triggers garnishment, how much of your earnings can be taken, and what steps you can take to fight back. You’ll also learn about payment options, appeal rights, and special situations like child support or multiple jobs. By the end, you’ll have a clear picture of the process and the tools available to help you regain control over your financial future.
Wage garnishment happens when your employer withholds a portion of your wages to satisfy an outstanding debt. Unlike other types of debt collection, which may involve a creditor filing a lawsuit in court, tax-related garnishment often comes directly from a government authority. Both the Internal Revenue Service (IRS) and the New Hampshire Department of Revenue Administration (NH DRA) can order withholding from your paycheck without obtaining a judgment. This makes tax garnishment one of the most potent collection tools.
For federal tax debt, the IRS can serve a garnishment order on your employer and require periodic payments from each pay period until the debt is resolved. This process is authorized under federal law and carried out in accordance with specific provisions of the Internal Revenue Code. The NH DRA may also use wage garnishment at the state level to recover unpaid state taxes, pay the state-level penalties, and pay interest. In both cases, your disposable earnings—the money left after legally required deductions, such as Social Security and Medicare—determine the portion of your paycheck subject to garnishment.
The effect on your income can be significant. Because the amounts subject to garnishment are determined by your filing status, number of dependents, and other factors, you may find your take-home pay reduced enough to interfere with everyday expenses like rent, food, or transportation. While this situation can feel overwhelming, it’s important to remember that garnishment is not permanent. With the proper knowledge of your rights, legal protections, and available options, you can take steps to stop or reduce wage garnishment and protect your financial stability.
The Internal Revenue Service can collect unpaid federal taxes through wage garnishment. When a taxpayer owes a balance not paid after multiple notices, the IRS may issue Form 668-W as the official garnishment order to an employer. Once served, the employer must withhold money from the debtor’s paycheck and send it directly to the IRS. This process is carried out under the provisions of the Internal Revenue Code and does not require a court judgment. Because of this authority, the IRS can act quickly to secure money owed, leaving taxpayers with little time to respond unless they take immediate action.
At the state level, the New Hampshire Department of Revenue Administration (NH DRA) holds similar authority to pursue tax debts under state law. If you fail to pay assessed state taxes, penalties, or interest, the department can initiate debt collection efforts, including wage garnishment, property liens, and levies. The NH DRA is empowered to serve employers with orders requiring them to withhold a portion of an employee’s income. Employers must comply with these orders and send periodic payments until the debt is satisfied or an arrangement is made with the department.
While federal and state tax agencies have strong collection powers, wage garnishment is subject to legal limits and protections. The Consumer Credit Protection Act (CCPA), enforced by the U.S. Department of Labor, sets rules for how garnishment interacts with wages. Although tax debts are generally exempt from some of the CCPA’s strict limits on withholding, the law ensures that employees retain certain rights. For example, an employer cannot terminate a worker solely because of one garnishment, and there are limits on how much money can be withheld in a given pay period. These protections help balance government agencies' authority with individuals' rights to retain enough income for basic living expenses.
For federal tax debts, wage garnishment begins only after a series of required steps. First, the IRS assesses the debt owed based on your filed return or an additional determination. Next, the agency sends a series of notices demanding payment. If you fail to respond, the IRS issues a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. This formal notice is provided at least 30 days before garnishment begins, giving you the last opportunity to request a hearing, make payment, or set up an installment agreement. If no action is taken within that period, the IRS may serve your employer with Form 668-W, which obligates them to withhold money from your paycheck until the debt is satisfied.
The New Hampshire Department of Revenue Administration follows a similar process when enforcing state tax debts. Wage garnishment may be triggered when taxes remain unpaid after assessment, notices are ignored, or payment plans are missed. Before garnishment can start, the department must send proper notice and allow you to respond or appeal. If you fail to act, the department can issue a garnishment order directly to your employer, requiring them to withhold income in accordance with state law. Like the IRS, the NH DRA does not need a court judgment to proceed with wage garnishment.
Although the IRS and NH DRA have strong authority, both must respect specific due process provisions. These include providing written notice of the debt, explaining the amounts owed, outlining your right to request a hearing, and giving a reasonable response period before garnishment starts. These notices are critical because they serve as your opportunity to decide how to address the debt before money is taken from your paycheck. Ignoring them increases the risk of automatic garnishment and reduces your ability to negotiate more manageable solutions.
Wage garnishment for tax debts does not happen overnight. Both federal and state agencies must follow a sequence of notices and actions before money is withheld from your paycheck. Understanding this process helps you identify when and how you can respond to protect your income.
Once a tax debt is determined—either from your filed return or an agency’s assessment—you’ll receive written notice of the amount owed. These letters outline your balance, due dates, and available payment options. This is your earliest chance to address the debt before enforcement actions begin.
The agency will send additional notices if you do not pay or respond. These letters become progressively more urgent and may warn of legal consequences. Interest and penalties continue to accrue during this period, increasing the total debt owed.
Before garnishment starts, the IRS or the New Hampshire Department of Revenue Administration must issue a Final Notice of Intent to Levy (or equivalent state notice). This document informs you that garnishment is imminent and explains your right to request a hearing. You generally have 30 days from the date of the notice to act.
If no action is taken, the agency serves your employer with a garnishment order, such as IRS Form 668-W. Once received, your employer is legally required to comply. They must calculate amounts subject to garnishment, withhold them from each pay period, and forward the money directly to the collecting agency. You’ll also be asked to complete a Statement of Dependents, which can influence how much of your paycheck is protected.
Once active, garnishment continues each pay period until the debt is paid, an installment agreement is in place, or another resolution is reached. Employers must retain records of the withholding and continue to serve as intermediaries until they are notified in writing to stop. This ongoing process can strain your finances but also motivate you to seek relief through appeals, payment plans, or other solutions.
The amount that can be taken from your paycheck depends on whether the garnishment is for federal or state tax debt. Unlike other debts that usually require a court order and are limited by strict caps, tax garnishments are enforced directly by government agencies and can reach higher amounts. Knowing the limits and exemptions helps you understand what portion of your wages may be withheld.
The IRS uses Publication 1494 for federal tax debts to determine how much of your income is exempt from garnishment. The exempt amounts depend on your filing status, number of dependents, and pay period frequency. Anything above the exempt amount is subject to withholding.
Single
Married Filing Jointly
Head of Household
Married Filing Separately
Additional exemptions may apply for taxpayers over 65 or blind, reducing the amounts subject to withholding.
In New Hampshire, the Department of Revenue Administration follows similar principles but applies rules under state law. While federal tables set limits for IRS garnishments, the state may determine exemptions based on your income, household size, and necessary living expenses. Employers must comply with the garnishment order served by the department and withhold the required amounts until the debt is resolved.
Both federal and state garnishment calculations are based on disposable earnings, which are your wages after required deductions. These deductions typically include federal, state, and local taxes, Social Security, and Medicare. Voluntary deductions, such as health insurance or retirement contributions, do not reduce disposable income for garnishment. This means the portion of your paycheck subject to garnishment may be larger than you expect.
By understanding these rules, you can estimate how much money may be taken from each pay period and plan accordingly. If the amounts withheld cause financial hardship, you may be eligible to request relief or modify the garnishment through available legal channels.
Facing wage garnishment can feel overwhelming, but several solutions may reduce or even stop the withholding from your paycheck. Both federal and state tax agencies provide resolution programs that allow taxpayers to regain financial control while still addressing their debts. The best option depends on your financial situation, the amount owed, and your long-term ability to make payments.
If you cannot pay in full, installment agreements provide a structured way to resolve your debt:
These agreements must be set up with the IRS or the NH Department of Revenue Administration, and you must comply with the terms to prevent further enforcement.
By exploring these options, taxpayers can often find a path forward that allows them to satisfy their debts without losing the ability to pay for essential needs.
Taxpayers facing wage garnishment are not without recourse. Both federal and state systems provide opportunities to appeal, request reviews, or negotiate alternatives before or during the garnishment process. Acting within the required deadlines is critical, since missing them can limit your ability to stop withholding from your paycheck.
The IRS provides formal appeal rights before garnishment begins:
The New Hampshire Department of Revenue Administration also allows taxpayers to challenge wage garnishment:
Whether you’re dealing with federal or state tax garnishment, deadlines are strict. Failing to respond by the stated date on your notice means the agency can proceed with garnishment without your further input. Filing on time preserves your rights, allows you to request payment alternatives, and may prevent money from being withheld unnecessarily.
Not every garnishment situation looks the same. Certain circumstances, such as child support obligations or multiple income sources, can change how much of your paycheck is withheld. Knowing these special rules can help you anticipate challenges and make informed decisions.
If you are already paying child support or alimony through a court order, this may affect your garnishment. Sometimes, the IRS or the New Hampshire Department of Revenue Administration adjusts the amounts subject to withholding to ensure both obligations are recognized. However, the same dependent cannot be claimed for child support reduction and exemption purposes.
Taxpayers with multiple jobs or additional income streams may face higher garnishment rates. The IRS can allocate exemptions to one employer and order 100% of wages from another. This can be especially challenging if your combined income leaves little disposable earnings after garnishment.
Irregular forms of compensation, such as bonuses and commissions, are generally not protected by standard exemption tables. These payments can be garnished in full since they fall outside of regular pay periods. You could lose your entire bonus if a garnishment order is active.
Federal employees may face different rules than private-sector workers. Garnishments for federal employees can reach up to 15% of disposable pay, and agencies use their own calculation methods. Federal workers need to review the amounts withheld carefully and seek clarification if they seem incorrect.
Failing to respond to notices or ignoring active wage garnishment can have serious and lasting consequences. These effects reach beyond your paycheck and may impact your financial stability, legal standing, and professional life.
Ignoring wage garnishment only makes the situation worse. The best way to protect your income and avoid these escalating outcomes is to act quickly to request a hearing, set up a payment plan, or explore other solutions.
When you receive notice of wage garnishment, time is critical. Acting quickly can help you protect your income, preserve your rights, and possibly stop or reduce the amounts withheld from your paycheck. Here’s a step-by-step action plan:
By following this timeline, you can take control of the process, comply with requirements, and increase your chances of reducing or stopping wage garnishment before it severely disrupts your financial stability.
The IRS uses exemption tables in Publication 1494 for federal taxes to determine protected amounts based on filing status and dependents. Anything above those amounts may be garnished. The Department of Revenue Administration in New Hampshire follows state law to set limits. Both agencies calculate using disposable earnings, which are wages left after legally required deductions like Social Security and Medicare taxes.
You can stop garnishment by paying the debt in full, but most taxpayers rely on alternatives. Options include installment agreements, partial payments, an offer in compromise, or hardship relief if withholding prevents covering essentials. Bankruptcy may pause garnishment, though some debts remain. Acting quickly and contacting the IRS or NH DRA offers the best chance for relief.
Wage garnishment continues until the debt is fully satisfied, resolved through an agreement, or suspended under hardship relief. The IRS generally has ten years to collect for federal tax debts before the statute of limitations ends. New Hampshire may follow different state rules. Garnishment ends once the agency confirms your balance, including penalties and interest, is paid or otherwise resolved in accordance with legal provisions.
You have 30 days after a Final Notice of Intent to Levy for federal debts to request a Collection Due Process hearing. New Hampshire requires appeals within 60 days at the state level, often filed through Granite Tax Connect or Form A-101. Meeting the deadline is essential because missing it reduces your ability to challenge garnishment, request payment alternatives, or unnecessarily prevent wages from being withheld.
You may request hardship relief if garnishment prevents you from covering rent, food, or transportation. The IRS can grant Currently Not Collectible status, pausing collection until finances improve. The New Hampshire Department of Revenue Administration also reviews hardship claims. To qualify, you must submit detailed financial information, including income, expenses, and household needs. Acting quickly improves your chance of keeping enough money for essentials.
Federal agencies like the IRS can garnish wages when taxes remain unpaid. This power does not require a court order, and exemption tables in IRS Publication 1494 determine amounts subject to withholding. Once notices are ignored, garnishment is automatic. Responding quickly, requesting a hearing, or arranging payments is the best way to prevent further debt collection enforcement from federal authorities.
Yes, wages, salaries, bonuses, and commissions may be garnished to cover unpaid tax debts. The amounts subject to withholding are based on disposable earnings—income left after required deductions like Social Security and Medicare. Voluntary deductions do not reduce this calculation, but exemptions tied to filing status and dependents may protect part of your paycheck, helping you estimate potential garnishment amounts accurately.
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