In the previous post, our blog discussed how the Minnesota Department of Revenue has a considerable number of administrative tools at its disposal when seeking to collect overdue tax debt, including wage levies.
To recap, a wage levy is essentially an order sent to an employer by the Department directing them to withhold up to 25 percent of a person's disposable wages, the amount left over after taxes and other withholding, to cover a past due tax debt. We'll continue this discussion in today's post.
Are there any conditions in which a person can be considered exempt from a wage levy?
State law dictates that certain individuals are indeed exempt from wage levies provided that they meet any of the following conditions:
- They are currently serving a jail or prison term, or have done so within the last six months.
- They qualified for and claimed the Earned Income Credit or Minnesota Working Family Credit on their last tax return.
- They are currently receiving need-based assistance from the government, or have done so within the last six months (Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), general or medical assistance, etc.)
It's important to note that individuals who meet any of these criteria must contact the Department on their own and provide the necessary evidence. Furthermore, qualifying for an exemption from a wage levy does not absolve the underlying tax debt.
Are there any conditions in which a wage levy can be reduced?
If a person is suffering from financial hardship as a result of the wage levy, such as not being able to afford basic necessities, they may request a reduction from the Department.
If granted, the agency will inform the employer.
When is a wage levy released?
As you might anticipate, a wage levy is released (or stopped) once the tax debt is paid in full. However, it can also be released if a person is found to be exempt, files for bankruptcy, or is subject to other levies that take precedence over the Department's levy.
If a release is granted, the agency will inform the employer.
Can an employer punish an employee for its having to comply with a wage levy?
State law expressly prohibits employers from disciplining or terminating an employee because of any kind of levy.
Here's hoping the foregoing information has proven helpful. The purpose was not to cause undue alarm, but rather to impress upon people the importance of speaking with a skilled legal professional if they encounter any sort of difficulty with the Department of Revenue.