Are Garnishment Deductions Reported on a W-2?

by Cynthia Gaffney ; Updated March 29, 2018

If you find that you've received a garnishment order on your wages, your employer's payroll department can provide you with information on the reason behind the deduction. The most common wage garnishments include unpaid child support, unpaid taxes and defaulted payments on student loans or credit cards. Your employer has no obligation to report this information on your Form W-2, although some choose to report the amount on the W-2 in box 14 labeled "Other."

What Exactly Is a Garnishment?

Wage garnishments are legal procedures, usually made by a court order to withhold part of a person's earnings to pay off a debt. The Internal Revenue Service, a state tax collector or a non-tax federal agency can also garnish wages for various unpaid taxes or other debts. In some cases, an employee voluntarily agrees to assign his wages, or turn them over, to pay off a creditor. Under this scenario, your wages aren't considered garnished, and this amount would not be included on Form W-2 even if your employer reports the garnishments to the IRS.

How to Find Total Garnishment Amounts

You'll find the amount garnished from your wages each pay period detailed on your paycheck stub. If you want the total amount of garnished wages for the year, keep all of your paystubs in case your employer doesn't add the total to your W-2. If you're missing a pay stub, request a copy from your employer.

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Garnishment Limits

When your wages are garnished, the amount taken out applies to your gross income, the amount you would take home after all of your required tax deductions and Social Security payments. Garnishments must adhere to certain legal limitations. The maximum amount of a weekly garnishment is 25 percent of your disposable earnings or any amount of disposable earnings that exceeds 30 times the current federal minimum wage, which is $7.25 per hour for 2018. Disposable earnings consist of the amount of earnings left after removing all legally required deductions.

Using Your Garnishment Information

When you learn the total amount you've paid in wage garnishments for a given tax year, the information can lead to a deduction on your income tax return. When your wages were garnished, the money likely went to pay overdue bills. If you deduct expenses from your taxes, such as hefty medical bills, you can still take that deduction because you've already paid them through wage garnishment. You must have enough deductions collectively to itemize them on your state or federal income tax returns. Consult with your accountant to find out the mechanics of taking the deduction and if you need to provide documentation of your garnishment payments when you submit your income tax return.

About the Author

Cynthia Gaffney started writing in 2007 and has penned tax and finance articles for several different websites. She brings more than 20 years of experience in corporate finance and business ownership. Gaffney holds a Bachelor of Science in finance and business economics from the University of Southern California.

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