Can Social Security Benefits Be Garnished for Back Taxes?
It’s common knowledge that the IRS can take your salary if you owe back taxes. But what if you rely only on your Social Security income? At this point, you may be asking ‘’Can Social Security be garnished for back taxes?’’
The short answer is yes. The agency has the power to take your Social Security benefits to collect unpaid taxes. But before that happens, the IRS must notify you and give you an opportunity to respond. In many situations, you can still stop the garnishment or reduce the amount collected.
Let’s walk through how Social Security garnishment works and what you can do if the IRS plans to take your payments.
When Social Security Benefits Can Be Garnished
The IRS can garnish your Social Security benefits when you have unpaid taxes and ignore repeated collection notices.
Technically, the IRS calls this action a tax levy rather than a garnishment. Most Social Security levies happen through the Federal Payment Levy Program (FPLP). This program allows the agency to collect tax debts directly from certain federal payments, including Social Security benefits.
Unlike private creditors, the IRS does not need a court order to levy federal benefits. Federal law gives the agency authority to collect delinquent taxes through administrative action.
This means the IRS can direct the Treasury Department to automatically withhold part of your Social Security payment each month until the balance is resolved.
How Much of Your Social Security Can the IRS Take?
In most cases, the IRS takes no more than 15% of your benefit payment through the Federal Payment Levy Program.
For example, if your monthly Social Security benefit is $2,000, the IRS could levy 15%, or $300. You would continue to receive the remaining 85% of your benefit, or $1,700 each month, while the IRS collects the remaining portion.
This garnishment continues month after month until the tax debt is fully paid, the IRS releases the levy, or you enter into a resolution program such as an installment agreement or another approved payment arrangement.
In some situations, the IRS may issue a manual levy of your Social Security payments through a revenue officer. These cases usually involve large tax debts or long periods of noncompliance. When this happens, the IRS could potentially take more than 15% of your benefits.
Social Security Benefits The IRS Can Garnish
The IRS can levy several types of Social Security benefits, including:
- Social Security retirement benefits
- Social Security Disability Insurance (SSDI) benefits
- Adult survivor benefits
These benefits count as federal payments and may be subject to IRS collection if a taxpayer owes back taxes.
Social Security Benefits The IRS Cannot Garnish
Here are the benefits that remain fully protected from IRS levy:
- Supplemental Security Income (SSI)
- Survivor benefits paid to children
- Lump-sum death benefits
These payments exist to support individuals with limited financial resources, so federal law protects them from tax collection efforts.
Other Debts That Allow Social Security Garnishment
Back taxes are not the only debts that can lead to Social Security garnishment. The law also allows garnishment of Social Security benefits for certain government-related obligations, such as:
- Child support
- Alimony
- Defaulted federal student loans
- Certain federal agency debts
Most private creditors, like credit card companies, personal loan lenders, and medical providers, cannot garnish Social Security benefits directly.
However, once you deposit your funds into a bank account and mix them with other funds, creditors may try to levy the bank account itself under certain circumstances.
How The Levy Process Works
The IRS cannot simply begin withholding your Social Security benefits without giving you a notice. The agency must follow the following collection process before levying on your payments.
1. The IRS Submits the Debt to the Bureau of the Fiscal Service
If your tax debt remains unpaid, the IRS may send your account to the Bureau of the Fiscal Service (BFS). This office is part of the U.S. Treasury that processes levies on certain federal payments.
2. The BFS Reviews Federal Payment Records
The BFS then scans federal payment records to identify individuals who receive government payments. If the system finds that you receive Social Security benefits, your account may qualify for a levy under the Federal Payment Levy Program.
3. The IRS Sends a Final Notice of Intent to Levy
Before the levy begins, the IRS must send you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. This notice explains the IRS’s plan to begin collecting from your benefits and your rights.
4. You Have 30 Days to Respond
After receiving the notice, you have 30 days to take action. During this period, you can request a Collection Due Process hearing, dispute the levy, or work with the IRS to set up a resolution.
5. The Levy Begins if No Action Is Taken
If you do not respond within 30 days, the IRS may proceed with enforcement and collect up to 15% of your monthly benefit.
How To Stop Social Security Garnishment
The simplest way to stop the social security levy is to pay your tax debt in full. If that’s not possible, you can apply for one of the following resolutions:
- Installment Agreement: This option allows you to pay your tax debt in affordable monthly payments.
- Offer in Compromise: If qualified, this option would allow you to settle your tax debt for less than the original balance.
- Currently Not Collectible Status: If paying the debt would prevent you from covering basic living expenses, the IRS may classify your account as Currently Not Collectible, which will pause the collection efforts.
- Collection Due Process Appeal: When you file an appeal within the required time frame, the levy temporarily stops while the IRS reviews your case.
Debt Relief Professionals Who Can Help Stop Garnishment
If you’re facing garnishment and are seeking help to stop it, make sure to contact professionals who specialize in tax debt resolutions. These professionals may include:
- Tax resolution firms
- Certified Public Accountants (CPAs)
- Tax attorneys
- IRS Enrolled Agents
Tax Samaritan is a team of Certified Public Accountants (CPAs) and IRS Enrolled Agents (EAs) specializing in U.S. expat tax preparation and IRS tax resolution services. Our firm works with taxpayers facing back taxes, levies, and other IRS issues. If your Social Security benefits are at risk of garnishment, talk to us so we can review your situation, determine your options, and help you work toward a resolution with the IRS.
Frequently Asked Questions
1. Can the IRS take your entire Social Security check?
Usually no. Under the Federal Payment Levy Program, the IRS typically limits the levy to 15% of your monthly benefit. In rare cases involving manual levies, the amount could exceed that limit depending on your circumstances.
2. Can Supplemental Security Income (SSI) be garnished?
No. Supplemental Security Income (SSI) is fully protected from IRS levy and most other forms of garnishment. These benefits exist to support individuals with limited income and resources, so federal law protects them from collection actions.
3. Do state tax agencies have the same power to garnish Social Security benefits?
Generally, state tax agencies do not have the same direct authority as the IRS to levy Social Security benefits. They may, however, pursue other collection methods depending on state law. Each situation depends on the specific state and type of tax debt.
4. What debts allow Social Security garnishment?
Several government debts allow Social Security garnishment. These include federal taxes, child support, alimony, and defaulted federal student loans. Most private creditors cannot garnish Social Security benefits directly.
5. Can the IRS garnish my spouse’s Social Security benefits?
The IRS generally cannot garnish your spouse’s Social Security benefits for a tax debt that belongs only to you. However, different rules may apply if you filed joint tax returns and the liability belongs to both spouses. In those cases, both spouses may become responsible for the debt.
6. How long does it take for garnishment to start after the final notice?
After the IRS sends a Final Notice of Intent to Levy, you typically have 30 days to respond. During this time, you can request a hearing or work out a resolution with the IRS. If no action occurs within that period, the IRS may proceed with the levy.
Get Help with IRS Levy
If you’re worried about losing part of your Social Security benefits to back taxes, don’t wait until the IRS sends a notice.
Many taxpayers qualify for IRS programs that can resolve tax debt in a manageable way and potentially prevent a levy altogether.
If you’d like guidance on your situation, click the button below to request a quote and schedule a FREE 30-minute consultation. Our team will review your case and help you determine the best path forward.
