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Definition of Income Withholding
Income withholding is the court or administratively ordered deduction of a
specified amount from a parent's income for payment of child support.
Documents Sent to the
Employer
All employers must honor an Order/Notice to Withhold Income for Child Support
from any state. Out-of-state Orders/Notices are valid throughout the
country, including U.S. territories.
The federal government requires all states to use a universal form. Illinois
state law 305 ILCS 5/10-16.2 allows for the use of a universal Order/Notice to
Withhold Income for Child Support to be sent to employers for purposes
of income withholding for child support.
The Order/Notice to Withhold Income for Child Support provides the
following information:
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Employee's name, address, IV-D case number, support order number and Social
Security number
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Begin date of the support order
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Date withholding for current support terminates, which shall be the date of
termination of the current support obligation set forth in the order for
support
-
Various pay cycles to enable the employer to comply with Orders/Notices
without varying their pay cycles
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Dollar amount required to be withheld for current support
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Dollar amount required to be paid periodically for payment of any past-due
support
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Dollar amount required to be paid periodically for payment of the amount of any
delinquency
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Total amount to be withheld and the frequency for withholding
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Any required premium to be withheld if enrollment for a child as a beneficiary
of a health insurance plan is required and, if applicable
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Name and address where the employer must send withheld payments
The Illinois Department of Healthcare and Family Services or the issuing agency
sends the employer the following forms (as applicable):
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Order/Notice to Withhold Income for Child Support
(Illinois Form HFS 3683)
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Child Support Remittance Form
(Illinois Form HFS 2599)
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National Medical Support Notice
(Illinois Form HFS 3554)
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Health Insurance Reports, if employer or union-related health insurance
is ordered (Illinois Form HFS 1442
These forms provide a summary of all the information the employer needs to
comply with income withholding and dependent medical insurance requirements.
| Note: When an employer receives these forms from an out-of-state agency,
they will have different numbers but similar formatting and content. |
Method of Service
The Order/Notice to Withhold Income for Child Support and any
accompanying documents may be served on an employer by:
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First-class mail;
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Certified mail, return receipt requested;
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Facsimile transmission or other electronic means;
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Personal delivery; or
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Other method provided by law for service of a summons.
Employer
Responsibilities
Upon receipt of the Order/Notice to Withhold Income for Child Support,
the employer should:
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Date stamp the documents;
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Determine if the order is "authentic;"
That is, it appears to be an authentic and complete legal document. It should
include:
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The duration and amount of child support;
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Current delinquency and arrears (if applicable);
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Medical support terms (if ordered); and
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Where to remit the payments.
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Give a copy of the Order/Notice
to the employee if it has been issued by another state;
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Follow the terms of the order; and
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Assess fees as appropriate. (Under Illinois law, the employer can deduct and
retain up to a $5 per month fee from each employee for withholding of income.
The employer deducts the fee from the employee's remaining income, not the
support payment.)
Employer Compliance
with an Order/Notice to Withhold Income for Child Support
Only the employee has the right to dispute the terms of an Order/Notice to
Withhold Income for Child Support. To contest the Order/Notice,
the employee must contact the issuing agency or tribunal.
If the employer is unable to implement the withholding either because the
individual named in the Order/Notice is not an employee, is no longer an
employee or never was an employee, the employer completes #8 on Page 2 of the Order/Notice
and returns copies of both sides of the page to the department or other issuing
agency. If the employer is unable to implement the Order/Notice because
withholding is already in place for the child based on another state's Order/Notice,
the employer should contact the issuing agency.
The employer must:
Follow the issuing state's laws regarding:
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Duration and amount of child support - current and past-due;
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Medical support terms;
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Where to remit payments; and
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Payment of fees and costs charged (if any) by the child support enforcement
agency, issuing court or custodial party's attorney.
Follow the state laws of the employee's principal place of employment regarding:
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When to begin withholding;
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When to remit payments (this can be from 1 to 7 business days after payday);
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Mandatory deductions;
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Maximum amount to be withheld (within Consumer Credit Protection Act limits);
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How to allocate withholding across multiple child support orders;
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Administrative fee the employer is permitted to charge; and
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Other terms and conditions that may be set by state law.
| Note: states provide instructions and contact information with each Order/Notice.
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Definition of Income
Income is defined as any periodic form of payment due an individual, regardless of source, including wages and salaries, commissions, bonuses, Workers' Compensation, disability, payments pursuant to a pension or retirement program, severance pay and interest.
Under Illinois law, the term "income" excludes certain amounts
that cannot be considered when determining pay available for child support
withholding. The following amounts are excluded as income:
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Federal taxes
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State taxes
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Local taxes
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Social Security (FICA)
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Required disability contributions
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Required retirement contributions
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Mandatory union dues
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Mandated health insurance
Withholding
Calculations
There are two basic steps to determine how much to withhold for child support
from an employee's income:
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Calculating disposable income
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Calculating allowable disposable income
Use the new Allocation
Calculator to simplify the calculations involved in withholding the
correct amounts for each order. Macros should be enabled to allow the buttons
on the calculator to operate correctly.
Definition of
Disposable Income
Disposable income is the amount of earnings remaining after subtracting certain
mandatory deductions from an employee's gross pay. (See Definition of
Income above.) Disposable income is not necessarily the same as net
pay. An employee may have a deduction taken from his or her pay that is not
mandatory, such as voluntary union dues or a loan payment.
| Note: Disposable Income = gross pay - mandatory deductions Definition of
Allowable Disposable Income |
Allowable disposable income is the maximum amount available for child support
withholding. In most cases, the amount ordered to be withheld will be less than
the allowable disposable income amount, and the ordered amount can be withheld
without any problem. Even if the withholding order specifies a higher payment,
the allowable disposable income is the most that may be withheld.
| Note: Allowable Disposable Income = disposable income x CCPA % limit
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Income Withholding and
the CCPA
The federal Consumer Credit Protection Act (CCPA) sets limits on withholding
from an employee's disposable income based on his/her current family situation
and child support payment history. The CCPA protects the employee from having
an excessive amount withheld. Although most states follow the federal limits,
some states have enacted laws that provide even more protection of the
employee's income. Employers may direct questions regarding lump-sum or
irregular payments to the child support enforcement agency or court that issued
the Order/Notice to Withhold Income for Child Support. The withholding
limits set by the CCPA, and adopted by Illinois, are:
|
Percentage |
Withholding Limits |
| 50% |
If the non-custodial parent has other dependents and owes no arrearages or is
less than 12 weeks in arrears
|
| 55% |
If the non-custodial parent has other dependents and is over 12 weeks in
arrears
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| 60% |
If the non-custodial parent has no additional dependents and owes no arrearage
or is less than 12 weeks in arrears
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| 65% |
If the non-custodial parent has no other dependents and is over 12 weeks in
arrears
|
| A dependent means there is a child and/or spouse for whom the
employee has responsibility. "In arrears" means the non-custodial parent owes
past-due, unpaid support. |
Multiple Orders/Notices
to Withhold - Same Employee and Same Child
The employer should honor only one withholding order for current support for a
child. When an employer receives more than one order for a child, the issuing
agencies, not the employer, are responsible for resolving this issue. If an
employer is withholding on one order and subsequently receives a second order
for the same child, the employer should:
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Continue to honor the first order received;
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Give the employee a copy of the second order;
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Contact the issuing agency that sent the second withholding order and
- Advise that payments are already being withheld for the child
named in the order and are being sent to another jurisdiction; and
- Provide payment information such as the amount of the withholding
and where the withholding is being sent; and
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Contact the issuing agency that sent the first withholding order and advise of
the second order.
Multiple Orders/Notices
to Withhold - Same Employee and Different Children
An employer may receive multiple Orders/Notices to Withhold Income for Child
Support for the same non-custodial parent (different
children/families). Federal regulations require that if the payment withheld is
not sufficient to cover the full amount of current support due for all the Orders/Notices,
each family must receive some portion of the payment. states have
laws/procedures specifying how the payment should be allocated among the
families. When an employer receives multiple Orders/Notices for the same
non-custodial parent and Illinois is the employee's principal place of
employment, the employer must withhold according to Illinois law for allocating
payments. The employer must not withhold on a "first-come, first-served" basis.
(See Example: Illinois Allocation Method below.) An employer must
withhold and pay over child support before all other garnishments, with one
exception. The only withholding that takes precedence over a child support
withholding is a federal (IRS) tax levy entered before the underlying child
support order was established. When determining precedence, the
employer must consider the date the underlying child support order was
established and not the date the Order/Notice was served on the
employer. (See discussion of IRS Tax Levy and Child Support below.)
Insufficient Income
to Withhold Ordered Amounts
If the income available for withholding under the federal Consumer Credit
Protection Act is insufficient to cover the total child support payment(s), as
ordered, then the employer withholds amounts, using the following priorities:
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Current child support
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Health coverage premium
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Arrearage
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Delinquency
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Notice of Levy (wage garnishment)
If there is not enough allowable disposable income available for the health
care premium after the current child support is withheld, then the employer
withholds for current child support and uses any remaining income available for
arrearage payments and then for delinquency payments (ILCS 750 28/35).
If there is enough allowable disposable income to pay multiple orders, the
employer withholds and pays over the full amount of all obligations due for
each order. Sometimes, however, an employee's earnings do not stretch far
enough to pay all of his or her obligations. If there is not enough allowable
disposable income, the employer follows the allocation method of the employee's
principal state of employment to determine how much to withhold and pay over
for each order. Illinois law requires the employer to prorate the withholding
by allocating a percentage to each order based on the total dollar amount of
current support ordered.
Example: Illinois
Allocation Method
Case Facts:
|
Case Facts |
Monthly Income/Payment |
| Order A current support: |
$ 90 |
| Order B current support: |
$ 75 |
| Order B arrearage: |
$ 15 |
| Order C current support: |
$ 62 |
| Assume the employee's allowable disposable income is $180. |
Withholdings:
|
Withholding Type |
Total Monthly Withholdings |
| Total current support due: |
$227 |
| Total arrears due: |
$ 15 |
There is not enough allowable disposable income ($180) for the
employer to withhold
the entire amount of current support due for all three orders ($227). The
employer cannot withhold for the arrearage payment. |
Allocation: The employer allocates a percentage of the payment to each
order based on the total dollar amount of all of the current support
obligations. First, the employer adds the total current support due on all
withholding orders. ($227) Next, the employer divides the current monthly
support amount for each order by 227 to obtain the allocation percentage to
apply to the allowable disposable income.
|
Order |
Percentage Total |
| Order A |
$90.00 ÷ 227 = 39.65% |
| Order B |
$75.00 ÷ 227 = 33.04% |
| Order C |
$62.00 ÷ 227 = 27.31% |
The employer then multiplies the $180 allowable disposable income figure by the
applicable percentage to obtain the payment for each order.
|
Order |
Allocated Payment |
| Order A |
$180 x 39.65% = $71.37 |
| Order B |
$180 x 33.04% = $59.47 |
| Order C |
$180 x 27.31% = $49.16 |
IRS Tax Levy and
Child Support
An IRS tax levy takes precedence over a child support withholding order only if
the tax levy was entered before the child support order was established. The
priority determination between a child support withholding order and an IRS tax
levy depends on the date the original child support order (as opposed to the Order/Notice
to Withhold Income for Child Support) was established.
If the employer does not have the original order date (the underlying order,
not the Order/Notice to Withhold Income for Child Support), the
department recommends the following:
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If the employer receives an Order/Notice to Withhold Income for Child Support
for an employee who already has a federal tax levy in place, the employer will
contact the issuing child support agency. The child support agency can then
contact the IRS to discuss an alternate payment plan.
-
If the employer receives a federal tax levy for an employee who already has a
child support withholding order in place, the employer will contact the IRS and
tell them a withholding order is already being honored. The IRS may then elect
to contact the issuing child support agency.
A federal tax levy is the only withholding that takes precedence over a child
support withholding and only if the levy is prior to the child support order.
An employer should always withhold child support before withholding for the
following voluntary and involuntary deductions:
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Assignment of wages
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Non-tax federal debt
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State and local tax levies
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Creditor garnishment
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Federal tax levy after the child support order date
Other Garnishments
and Child Support
An employer must withhold on an Order/Notice to Withhold Income for Child
Support before any other garnishment. When an employer is ordered to
withhold income for child support and a garnishment is also in place, the
employer:
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Deducts the child support withholding from the employee's wages; and
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Determines the lesser amount of:
a. The difference between the weekly disposable income (before the child
support withholding) and 30 times the minimum wage [30 x $5.15 = $154.50]
i. If the income is paid biweekly, multiply the minimum
wage times 60 [60 x $5.15 = $309].
ii. If the biweekly disposable income is less than $309 or
the
weekly income is less than $154.50, no withholding for
garnishment may be made.
OR
b. 25% of the weekly disposable income.
For the garnishment, the employer may withhold the amount remaining after the
child support deduction up to the lesser amount figured in Step 2. above.
For examples of how to apply these guidelines, see the
Federal Office of Child Support Enforcement's Employer Services Web
site.
Bankruptcy and Child
Support
Even if an employee declares bankruptcy, he or she is still obligated to pay
child support. Debts due for delinquent child support are not dischargeable in
bankruptcy actions. An employer may be notified, however, that it is no longer
responsible for withholding the payments because a trustee of the bankruptcy
court has taken over this task.
The employer should continue the withholding until official notification from
the agency or bankruptcy court is received. The employer should also notify the
child support agency that a bankruptcy order has been received and notify the
bankruptcy court that a child support order is in place. The employer must
always follow the payment instructions received from the bankruptcy court.
Submitting Payments
Federal regulations require employers to submit child support withheld within
seven (7) business days of the scheduled pay date or the date the income would
have been paid or credited to the employee. The issuing agency provides
specific instructions for submitting payments on the Order/Notice to Withhold
Income for Child Support and will send subsequent notification when an
employer should redirect payments.
Unless otherwise directed in the Order/Notice employers should submit
income withholding payments to:
Illinois State Dsibursement Unit (SDU)
P.O. Box 5400
Carol Stream, IL 60197-5400
When directing payments to the Illinois State Disbursement Unit, the employer
must provide the following information for each payment for each separate
order:
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