Date : March 8, 2024 · Time : Available All Day · Duration : 90 Minutes · Speaker : Vicki M. Lambert
Wage garnishment can disrupt financial stability, affecting one’s ability to meet everyday expenses. Knowing your rights and options when it comes to wage garnishment is essential for taking control of your financial situation. This blog post will provide you with an overview of what wage garnishment entails and what legal steps you can take. For many, the term wage garnishment might sound daunting, but it is crucial to know that there are laws in place designed to protect you. From understand...
TABLE OF CONTENTS ; If you owe back taxes · IRS procedures prior to garnishment · How much the IRS can garnish
Tax Issue, Tax Summary ; Court Ordered Withholdings, Court-ordered third party payments include: Child Support, SS Wage Garnishment, Court-Ordered Garnishments, Student Loan Repayment, Federal and State Tax Levies, Chapter 13 Bankruptcy ; DeMinimis Benefit Exclusion, A fringe benefit qualifies for tax exclusion as a de minimis fringe benefit if its value is too small to justify the administrative burden of accounting for the benefit. Examples include coffee, doughnuts, or soft drinks furnished to employees; occasional theater or sporting event tickets; if the institution frequently provides these minor benefits, then the aggregate value of those benefits may be substantial. When this occurs, a benefit of a relatively small value will fail to qualify for the de minimis exclusion because the aggregate value is significant enough to warrant accounting for the benefit.Cash payments or cash equivalents like gift cards do not qualify for the DeMinimis gross income rule. At W&M, the DeMinimis Benefit maximum amount is $100.00. ; Employee - Gift Cards, Cash payments or cash equivalents to include gift cards do not qualify for the DeMinimis gross income rule. W&M gift policy prohibits the use of gift cards as gifts. Cash or equivalents to employees must be paid through the payroll process. ; Employee - Monetary Awards, University employees receive awards for their service to the institution or for academic or civic achievements. Generally, awards are included as part of an employees gross income in an amount equal to any cash received or, if the award consists of property or services, the fair market value of the property or services received. ; Employee Achievement Awards, An employee achievement award is defined as a tangible item of personal property granted by an employer to an employee in recognition of their length of service. The university's policy sets the upper limit for the value of such awards that an employee can receive. Departments that offer achievement awards to employees are required to cover the expense using local funds. Any gift surpassing the predetermined maximum value will render the entire amount of the gift subject to taxation and mandatory reporting. ; Employee Educational Assistance Programs, Under the IRS policy, an employee may receive up to $5,250 of employer-provided educational assistance annually (calendar year), assuming all policy conditions are met. Any amount received over the maximum for employer-provided educational assistance is included in an employees gross income. Currently, policy only covers W&M delivered courses. ; Employee Gross Income, Gross income is an individuals total earnings before taxes or other deductions. This includes income from all sources, not just employment, and is not limited to income received in cash; it also includes property or services received. ; Employee Legal Settlements, The taxability of employee legal settlements is based on the type of payment made. The general rule is that settlement amounts paid to a claimant are taxable to the claimant. The only non-taxable payments are for physical injury. ; Employee Overpayments, Employees notified of an overpayment have very few options for repayment. They must repay the overpayment within the same number of pay periods for which they receive the overpayment or they can write a personal check, but in no case should the repayment occur over a longer period of time than the overpayment occurred. ; Employee Scholarships and Fellowships, W&M employees may not receive any additional institutional financial assistance toward their educational goals beyond the benefit received through the Employee Educational Assistance Policy. ; Employee Supplemental Wages, Supplemental wages encompass various types of payments made to employees beyond their regular wages, such as bonuses, commissions, overtime pay, accumulated leave payouts, severance pay, awards, prizes, back pay, retroactive pay raises, and moving expense reimbursements; these payments are subject to taxation at the supplemental tax rate. ; Employees - Non-Resident alien (NRA) taxes, withholding and Reporting, Employees that are nonresident aliens must pay taxes on income earned in the US. Nonresident aliens may get taxed differently depending on their type of income. NRAs must certify their NRA status when they first receive payment from W&M and annually after that. ; Employees - Out of State Hire, Employees whose primary work is completed outside of Virginia. When it comes to tax withholding, payroll primarily follows the state's rules where the work is performed. These employees may owe income tax to their state of residence and where the work is performed. The rules are complex and handle case-by-case basis. Working outside Virginia create Nexus which results on tax presence in the State that can generate additional risks and liabilities for W&M. ; Flexible Reimbursement, The Office of Health Benefits in the Department of Human Resource Management (DHRM) administers the Commonwealth of Virginia Flexible Benefits Program. The program allows employees to contribute to a Medical Reimbursement Account (MRA) and/or a Dependent Care Reimbursement Account (DCRA) through payroll deduction on a pre-tax basis. The plan qualifies as a cafeteria plan authorized by Section 125 of the Internal Revenue Code. The Internal Revenue Service establishes the calendar year limits and minimum and maximum contribution amounts. ; Fringe Benefit Professional Dues and Licenses, University employees frequently incur dues for memberships in professional societies or associations. As a general rule, dues paid to business organizations, such as professional associations, are considered ordinary and necessary expenses ; Fringe Benefits - Clothing to Employees (to include shoes), Clothing is exempt as a de minimis fringe benefit if its value is small enough to make accounting for it unreasonable or impractical and if similar fringes aren't provided frequently. This exception applies, for example, to t-shirts or hats given to employees at an event. Required clothing, such as a uniform, might be excluded from income as long as the uniform may not be wearable outside the work environment. All other clothing valued greater than $100 must be reported as income. ; Fringe Benefits - Regalia, This falls under the Free Clothing Rule. Regalia is considered a personal purchase and it is not reimbursable by the university. However, the university may allow funds to be used for the rental expense in lieu of purchase. ; Fringe Benefits Employees Travel Advances, Travel advances in excess of substantiated expenses may not be held in anticipation of future travel and must be cleared. Failure to clear a travel advance within 60 days of the completion of the trip could result in the advance being reported to the IRS. The travel advance amount then becomes taxable income on the individuals W-2. ; Fringe Benefits Moving and Relocation, Moving and relocation stipend may be paid for a newly hired faculty or staff employee to move from their former residence to the new residence.For an employee to be eligible to receive a moving and relocation stipend, the following eligibility criteria must apply: (1) The distance between the employees new work location and the former residence must be 50 miles greater than the distance between the employees old work location and the former residence (2) The employee must be hired into a full-time salaried position for at least one year (twelve consecutive months), and (3) The relocation must be at the university's request, not for the convenience of the employee. ; Fringe Benefits Qualified Transportation Fringe Benefits (QTF), W&M does not allow departments to pay for parking on behalf of the employees. ; Fringe Benefits: Cell Phones, iPad, Laptops, Purchases of cell phones, iPad, and laptops for personal ownership are prohibited. All devices are owned by W&M. If the university cannot purchases a device for employee ownership. ; Fringe Benefits: Complimentary and Discounted Tickets to Athletic, Entertainment and Cultural Events, If the university occasionally provides tickets to its employees, the value of the tickets or the discount may be excluded from the employees gross income as a de minimis fringe benefit. However, the de minimis fringe benefit exclusion does not apply if an institution provides complimentary season tickets. ; Fringe Benefits: Personal Use of University Facilities, The exemption from incurring extra expenses or lost revenue for the university will be triggered if the employee's utilization of the facility does not generate any additional costs or revenue losses. As for the specific exemption pertaining to an employee's utilization of an "employer-supplied athletic facility," the facility's value is excluded from the employee's gross income if: (1) the facility is situated on the employer's premises; (2) the employer manages the facility; and (3) the facility is primarily utilized by employees. ; Fringe Benefits: Retiree Health Insurance Sponsored Payments, Employer-paid premiums for health insurance are exempt from federal income and payroll taxes. Additionally, the portion of premiums employees pay is typically excluded from taxable income. ; Fringe Benefits: Spousal Travel on Business Trips, W&M Employees are not eligible for spousal travel reimbursement. ; Health Insurance, Full-time and part-time salaried employees choose from among several different healthcare plans. State agencies and employees each pay a portion of health insurance coverage costs. Agencies administer healthcare benefits for their employees and collect and pay premiums to cover the cost of healthcare through Cardinal HCM payroll deductions. ; Honoraria, An honorarium typically involves a payment that is made to a person in exchange for services for which no specific fees were required or requested. Students at W&M may not receive honoraria payments. ; Independent Contractor, An independent contractor is an individual or entity that works or offers services for another party as a self-employed entity, separate from being an employee. The independent contractor has full control over how the work or service is carried out and is guided by the terms outlined in a mutually agreed-upon contract for a particular task. It's important to note that individuals who are employed by or currently enrolled as students at W&M cannot assume the role of independent contractors in any capacity. ; Misc. Employee Deductions, The Commonwealth of Virginia offers employees a wide range of programs and services that can be paid by the employee through payroll deduction. Some of these programs are State sponsored while others are administered through third party vendors. ; Optional Life Insurance, Employees covered by group life may purchase additional life insurance coverage for themselves, their spouse or children through the Optional Life Insurance Plan administered by VRS. Spouses are eligible for up to 50 percent of the maximum amount of members optional group life insurance coverage. Optional coverage for minor children who are at least 15 days of age may be purchased in increments of $10,000, $20,000 or $30,000, depending on the level of coverage selected. ; Overtime Meals, An employee may claim an overtime meal when he or she is required to work before or after a regularly scheduled workday and cannot be expected to return home for a meal. The value of that meal is taxable and reportable. ; Parking and Transportation, Internal Revenue Code Section 132(f)(1)(c) allows fees for on campus parking to be collected through payroll deduction on a pre-tax basis. Salary reduction agreement forms must be completed in advance of participation in the pre-tax program. ; Reporting Receipts of cash more than 10,000, All cash payments totaling over $10,000 received in a single transaction or a series of related transactions will require the completion of the IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, by the 15th day after the date the cash was received. ; Retirement Cash Match, The Code of Virginia section 51.1-609 and the Appropriation Act permit an employer-paid supplemental cash match for eligible employees who participate in the Commonwealth of Virginia 457 Deferred Compensation Plan (DCP) or a 403(b), tax- sheltered annuity (TSA). The supplemental cash match for DCP participants is administered under the Virginia Cash Match Plan 401A by VRS. ; Retirement VRS and ORP, The Virginia Retirement System (VRS) administers four different types of defined benefit retirement plans. A defined benefit pension plan is a plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service, and age, rather than depending directly on individual investment returns. Based on an employees current position, they may be eligible to elect an Optional Retirement Plan (ORP). ORPs are defined contribution retirement plans offered as an alternative to VRS retirement. A defined contribution plan is a type of retirement plan where the employer, employee, or both, make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts plus any investment earnings on the money in the account. Only employer contributions to the account are guaranteed, not the future benefits. In defined contribution plans, future benefits fluctuate based on investment earnings. ; Salary Reductions Plan, Internal Revenue Code (IRC) allows employees to defer tax on wages that are invested in certain retirement plans under salary reduction agreements. Two plans are available to Commonwealth employees, 457(b) (deferred compensation) and 403(b) (tax-sheltered annuity; limited eligibility) plans. Additionally, post-tax contributions, known as Roth contributions, are available for both Deferred Compensation and Annuities. ; Sales and Use Tax Exemption - Out of State, The university qualifies for some tax exemption for goods and services received in other states. We are not automatically Exempt. ; Sales and Use Tax Exemption - Virginia, The university qualifies for tax exemption for goods and services received in Virginia. Purchases made on behalf of W&M must be made using a Commonwealth of Virginia Sales and Use Tax Certificate of Exemption (Form ST-12), regardless of the method of payment or institutional funds used. ; Special Payments, Payments to employees for compensation and payments not normally associated with regular salary or wages are commonly referred to as Special Payments and may include temporary additional pay, military pay, healthcare premium rewards, and other miscellaneous income. ; Travel, Meal and Entertainment Expenses, For the university to deduct expenses for travel, meals, and entertainment as business expenses, the Internal Revenue Code requires that the employee maintain extensive substantiation. In general, a taxpayer must substantiate with records the following elements for each expenditure: (1) the amount of the expenditure; (2) the date, time, and place of the travel, meals, or entertainment; (3) the business purpose served by the expenditure; and (4) the business relationship to the taxpayer of each person entertained. If these requirements are not satisfied, the IRS can disallow the claimed deduction in full. In addition to the substantiation requirements, entertainment and travel expenses can be deducted only under limited circumstances, and lavish or extravagant entertainment expenses cannot be deducted. Expense Reports must be submitted within 60 days to remain non taxable. ; Unclaimed Property, Unclaimed property improperly or accounts that have no activity or contact with the owner for a specific period of time, called the dormancy period. By law, unclaimed property must be returned to the state after the dormancy period. The holder of the property must try to locate the owner before escheatment. Annually, all outstanding unclaimed property must be remitted to the Commonwealth. ; Unpaid Leave of Absences and Overpayments, Salaried employees who have unpaid leaves of absence may receive zero payments or partial payments for hours worked. Partial payments, sometimes known as docked pay, result when an employee does not have sufficient leave to cover an absence from work. Once the absence meets a specified period, as determined by the Department of Human Resource Management (DHRM), the employee is considered in a Leave Without Pay Status (LWOP). The LWOP may be voluntary or involuntary, and can affect both pay and benefits the employee is entitled to receive. ; Unrelated Business Income Tax (UBIT), A nonprofit, tax-exempt organization regularly carries on a trade or business that is not substantially related to its exempt purpose, except that it provides funds to carry out that purpose; the organization is subject to tax on its income from that unrelated trade or business. ; Virginia Sickness and Disability Program, The Virginia Sickness and Disability Program (VSDP) is administered by VRS in partnership with a VSDP third party administrator (VSDP TPA). VSDP provides state employees with supplemental income while out of work due to a short-term or long-term disability. ; Void Payments, The void payment process reverses gross-to-net payroll amounts (i.e., gross payroll, taxes, and deductions) from the employee record for payments created in error. ; W-9 / W-8 Collection, IRS Forms W-9 and W-8 are the forms sent to a vendor with the goal to Request for Taxpayer Identification Number and Certification, is used by businesses to get tax information from external parties. The information provided on these forms informs the company of what information to include in the corresponding tax reporting forms. ; Workers Comp, Employees injured during the course of employment are eligible for benefits under Virginia's Workers' Compensation Act if the injury is deemed compensable. WCP is responsible for administering the state workers compensation program under Title 65.2 of the Code of Virginia. WCP initially identifies employees eligible to receive workers compensation benefits and handles all related payments to physicians, agencies and employees (if applicable).
Employers, employees, and all parties in the wage garnishment ecosystem have a range of responsibilities—to each other and to themselves. When a person falls into debt or has other obligations, such as child support, a court may issue an order against their employer to withhold money from the person's paychecks in order to satisfy their debts and obligations. Employers have to follow the order while also complying with federal and state legal requirements. Depending upon the type of obligation...
You’ve Received a Wage Garnishment Notice–Now What? ; So, you’ve just received a wage garnishment notice. Now what? For business owners and HR leaders, a wage garnishment can cause confusion regarding procedures and paperwork. We’ve answered the most important questions HR professionals need to know to navigate the wage garnishment process successfully. Once you’ve received a garnishment, you have a few options. However, you must act fast. If you wait too long to challenge the garnishm...
Table of Contents ; What Is Wage Garnishment? · How Wage Garnishment Works · What Employers Need To Do After Being Notified · What Your Employee Can Do if Their Wages Are Garnished · Frequently Asked Questions
Different garnishment rules apply to different types of debt. And there are legal limits on... If you owe money to the IRS, watch out: The agency can take a big chunk of your wages, and it...
The Financial Crimes Enforcement Network, FinCEN Form 114, Report of Foreign Bank and Financial Accounts, is a crucial yet frequently misunderstood requirement for U.S. persons with foreign financial accounts. The FBAR may be familiar to many Americans living abroad, but it remains largely unknown to many U.S.-based individuals who might still have an obligation to file it. This can happen if, for example, they inherit a foreign account, a foreign relative grants them signature authority over an...
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