State Tax Levy Deductions

State tax levies are the legal seizure of taxpayers' assets to satisfy back income taxes owed. Use the Regional Tax Levy secondary classification for these kinds of deductions. For states with no state income tax (SIT), the payroll process doesn't calculate the deduction.

Don't use this classification for other state tax types as they might require different tax rules.

Note: For federal tax levies, use the Tax Levy secondary classification. For further info, see Federal Tax Levy Deductions in the Help Center.

During element definition, if you indicated deduction processing should stop after the total is reached, set a new amount limit. Use the <Regional Tax Levy> Total Owed Amount shared override. For further info, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center.

Are state tax levies supported?	Which states?
No	Alaska Florida Nevada New Hampshire South Dakota Tennessee Texas Washington Wyoming Note: If you define a regional tax levy for one of these states and attempt to process it in a payroll, the process ignores it. You will receive a message stating this deduction isn't allowed.
Yes, but under special considerations	Arizona Colorado Indiana Massachusetts Michigan Tax Virginia Tax For further info, see the following sections.
Yes	All others

Are state tax levies supported?

Which states?

Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

Note: If you define a regional tax levy for one of these states and attempt to process it in a payroll, the process ignores it. You will receive a message stating this deduction isn't allowed.

Yes, but under special considerations

Arizona
Colorado
Indiana
Massachusetts
Michigan Tax
Virginia Tax

For further info, see the following sections.

Yes

All others

Payroll Processing

Some states have rules that restrict the processing of a person's Regional Tax Levy deduction to one deduction per state per payroll period.

After the Regional Tax Levy deduction is satisfied, on the next pay cycle, the payroll process starts the next Regional Tax Levy deduction based on the element's subprocessing order.

The deduction is considered satisfied when:

Deduction is end dated
Time limit is met
Total owed is met

Arizona Tax Levies

Consider the following for Arizona regional tax levies.

For this calculation value	Consider this
Order Amount	Regional tax levies for Arizona don't require the Arizona Regional Tax Levy Order Amount override. If you set this override, the payroll process uses the amount in its calculations. Arizona follows the same legislative rules as federal tax levies for the protected pay amount.
Deductions at Time-of-Writ	Deduction at time-of-writ overrides are available for any deduction amounts in effect at the time the levy was received. These overrides: Reduce the earnings available for the tax levy Don't reduce the Form 1494 amount of protected pay 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. All other deduction amounts not included in deductions at time-of-writ reduce the employee's net pay. For further info, see Deductions at Time-of-Writ in the Help Center.
Publication 1494	Use the Regional Tax Levy secondary classification for Arizona tax levies that use publication 1494 for the calculations. If an employee requests to change their exemptions, and the state tax authority grants it, you can specify a new Statement of Exemptions Received Date. For further info, see Publication 1494 Tax Levies in the Help Center.

For this calculation value

Consider this

Order Amount

Regional tax levies for Arizona don't require the Arizona Regional Tax Levy Order Amount override. If you set this override, the payroll process uses the amount in its calculations. Arizona follows the same legislative rules as federal tax levies for the protected pay amount.

Deductions at Time-of-Writ

Deduction at time-of-writ overrides are available for any deduction amounts in effect at the time the levy was received. These overrides:

Reduce the earnings available for the tax levy
Don't reduce the Form 1494 amount of protected pay

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.

All other deduction amounts not included in deductions at time-of-writ reduce the employee's net pay.

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

Publication 1494

Use the Regional Tax Levy secondary classification for Arizona tax levies that use publication 1494 for the calculations.

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

Colorado Tax Levies

Colorado statutes don't provide a standard exemption percentage for state tax levies.

Use the Calculation Cards task to override the Colorado Regional Tax Levy Exemption Percentage value on the employee's Involuntary Deductions card component details. Refer to the info provided in the order for the appropriate override value. For further info, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center.

Indiana Tax Levies

Indiana processing fee can be the greater of:

$12
3% of the total owed specified by the order

The payroll calculation determines the fee amount to deduct. If 3% of the total owed is greater, the process deducts $12 per pay period until the total fee due is met.

To deduct the total fee in one payment, use the Indiana Regional Tax Levy Processing Fee Per Pay Period Amount override. For further info, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center.

Massachusetts Tax Levies

Consider the following for regional tax levies from Massachusetts.

What you want to do	How you do it
Change exemption amounts	The default exemption percentage for Massachusetts regional tax levies is 75%. If the order requires a different value, use the Massachusetts Regional Tax Levy Exemption Percentage override. For an order requiring 100% to be deducted, enter the exemption percentage as `0`.
Change dependent exemption amounts	Massachusetts allows additional exemption amounts if the employee provides a statement of exemption form. If the form is provided: Set the Massachusetts Regional Tax Levy Number of Dependents override to the requested number. Set the statement of exemptions received date on the card component detail.

What you want to do

How you do it

Change exemption amounts

The default exemption percentage for Massachusetts regional tax levies is 75%. If the order requires a different value, use the Massachusetts Regional Tax Levy Exemption Percentage override.

For an order requiring 100% to be deducted, enter the exemption percentage as 0.

Change dependent exemption amounts

Massachusetts allows additional exemption amounts if the employee provides a statement of exemption form.

If the form is provided:

Set the Massachusetts Regional Tax Levy Number of Dependents override to the requested number.
Set the statement of exemptions received date on the card component detail.

For further info, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center.

Michigan Tax Levies

Consider the following for Michigan regional tax levies.

Consideration	Description
Order Amount and Order Rate override	Don't use these overrides for Michigan tax levies.
Tax debt orders	Use the Regional Tax Levy secondary classification for Michigan tax debt orders. Use the Michigan Regional Tax Levy Total Allowances override to set the number of exemptions the employee is claiming, including one for themselves. For further information, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center. Set the filing status and statement of exemptions received date under the Involuntary Deduction Data calculation component detail. For further info, see Configure Involuntary Deduction Details for the US. For other nontax orders issued by the Michigan Department of Revenue, use either the Creditor Debt or Garnishment secondary classifications.

Consideration

Description

Order Amount and Order Rate override

Don't use these overrides for Michigan tax levies.

Tax debt orders

Use the Regional Tax Levy secondary classification for Michigan tax debt orders.

Use the Michigan Regional Tax Levy Total Allowances override to set the number of exemptions the employee is claiming, including one for themselves.

For further information, see Set Overrides on the Involuntary Deductions Card for the US in the Help Center.
Set the filing status and statement of exemptions received date under the Involuntary Deduction Data calculation component detail.

For further info, see Configure Involuntary Deduction Details for the US.

For other nontax orders issued by the Michigan Department of Revenue, use either the Creditor Debt or Garnishment secondary classifications.

Virginia Tax Levies

Consider the following for Virginia regional tax levies.

Consideration	Description
Order amount override	Regional tax levies for Virginia don't require the Virginia Regional Tax Levy Order Amount override. If you set this override, the payroll process uses the amount in its calculations. If the order specifies to take 100% of disposable income, enter a value of `1` in the Order Rate override.
Hardships	This state uses its own exemption table for employees claiming hardship. Based on the number of allowances and payroll frequency, the payroll process determines the protected pay amounts. These amounts are predefined using Exemption Rule value definition group. If an employee requests this hardship: Enter Yes in the Virginia Regional Tax Levy Hardship override on the appropriate component of the employee's Involuntary Deductions card. Identify their total number of allowances based on what the employee reports on their Virginia Claim for Exemption form. Use the Virginia Regional Tax Levy Total Allowances override on the appropriate card component to set this value. The payroll process derives the protected pay amount by using the Total Allowances override, the statement of exemptions received date, and the legislative Virginia hardship exemption amounts.

Consideration

Description

Order amount override

Regional tax levies for Virginia don't require the Virginia Regional Tax Levy Order Amount override. If you set this override, the payroll process uses the amount in its calculations. If the order specifies to take 100% of disposable income, enter a value of 1 in the Order Rate override.

Hardships

This state uses its own exemption table for employees claiming hardship. Based on the number of allowances and payroll frequency, the payroll process determines the protected pay amounts. These amounts are predefined using Exemption Rule value definition group.

If an employee requests this hardship:

Enter Yes in the Virginia Regional Tax Levy Hardship override on the appropriate component of the employee's Involuntary Deductions card.
Identify their total number of allowances based on what the employee reports on their Virginia Claim for Exemption form. Use the Virginia Regional Tax Levy Total Allowances override on the appropriate card component to set this value.

The payroll process derives the protected pay amount by using the Total Allowances override, the statement of exemptions received date, and the legislative Virginia hardship exemption amounts.