Federal Tax Levy Deductions

According to United States federal law, a tax levy is an administrative action by the IRS statutory authority.

This authority permits the IRS, without going to court, to seize property to satisfy a tax liability. For these kinds of deductions, use the Tax Levy secondary classification.

Note: For tax levies issued by Arizona, use the Regional Tax Levy secondary classification.For further info, see State Tax Levy Deductions in the Help Center.

There are special considerations when defining federal tax levies.

General Considerations
Form 2159 payroll deduction agreements
Publication 1494

For further info, see the following sections.

General Considerations

Consider the following when defining federal tax levies.

Consideration	Description
Deductions at time-of-writ	Deductions at time-of-writ represent the liabilities an employee has at the time a federal tax levy is served. To enable deductions at time-of-writ, you must add the appropriate calculation values to the Tax Levy deduction component on the employee's Involuntary Deductions card. Configuring wage basis rules to exclude element classifications isn't a suitable alternative for configuring time-of-writ deductions for tax levies. The payroll process doesn't refer to the wage basis rules when it determines what liabilities the employee had at the time a levy was served. For further info, see Deductions at Time-of-Writ in the Help Center.
Order Amount override	Federal tax levies don't require an Order Amount override. If you set an Order Amount override, the payroll process uses this amount in the calculations.
Override the total owed	You must continue deducting federal tax levies until you're explicitly instructed to stop them by the IRS, even if the deduction has exceeded its total owed. When you define the Tax Levy element, always select No for Processing stop when the total is reached. To terminate a Tax Levy deduction, you end-date its component on the person's Involuntary Deductions card. For further info, see Involuntary Deductions Card for the US in the Help Center.

Consideration

Description

Deductions at time-of-writ

Deductions at time-of-writ represent the liabilities an employee has at the time a federal tax levy is served. To enable deductions at time-of-writ, you must add the appropriate calculation values to the Tax Levy deduction component on the employee's Involuntary Deductions card.

Configuring wage basis rules to exclude element classifications isn't a suitable alternative for configuring time-of-writ deductions for tax levies. The payroll process doesn't refer to the wage basis rules when it determines what liabilities the employee had at the time a levy was served.

For further info, see Deductions at Time-of-Writ in the Help Center.

Order Amount override

Federal tax levies don't require an Order Amount override. If you set an Order Amount override, the payroll process uses this amount in the calculations.

Override the total owed

You must continue deducting federal tax levies until you're explicitly instructed to stop them by the IRS, even if the deduction has exceeded its total owed. When you define the Tax Levy element, always select No for Processing stop when the total is reached.

To terminate a Tax Levy deduction, you end-date its component on the person's Involuntary Deductions card. For further info, see Involuntary Deductions Card for the US in the Help Center.

Form 2159 Payroll Deduction Agreements

If you received a Form 2159 payroll deduction agreement, create an involuntary deduction using the Employee Requested secondary classification. Don't use the Tax Levy secondary classification.

Publication 1494

You use the Tax Levy secondary classification for federal tax levies that use publication 1494 for the calculations.

If an employee requests a change to their number of exemptions, and the IRS grants it, you can specify a new Statement of Exemptions Received Date. For further info, see Publication 1494 Tax Levies in the Help Center.