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.
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 |
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 |
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:
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Deduction is end dated
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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 |
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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:
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
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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 |
Change dependent exemption amounts |
Massachusetts allows additional exemption amounts if the employee provides a statement of exemption form. If the form is provided:
|
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.
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 |
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:
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. |