Deductions of taxes and involuntary withholding orders have priority over voluntary deductions. Once taxes, involuntary deductions, and deductions required by state law have been withheld, employers have the responsibility to prioritize voluntary deductions.
For more information, refer to Module 3, Lesson 2
Which of the following deductions has priority of withholding order over the others?
Charitable contributions
Health insurance premiums
Group-term life insurance
Garnishments. – Correct Answers
The correct answer is: $1,058.47
Under the CCPA, disposable earnings are determined by subtracting all deductions required by law from an employee’s gross earnings. Deductions required by law include federal income, state income, local income, social security and Medicare taxes.
For more information, refer to Module 3, Lesson 1
An employee earns $1,010.00 semimonthly and with this paycheck receives a $210.00 production bonus. Deductions include $68.20 for federal income tax, $93.33 for social security and Medicare tax, $125.00 for court-ordered child support payments, and a $25.00 credit union payment. For this pay period, calculate the employee’s semimonthly disposable pay for a creditor garnishment.
Child support orders have priority over creditor garnishments no matter in what order the wage attachments are received.
For more information, refer to Module 3, Lesson 1
An employee has a creditor garnishment in effect when the employer receives a child support order for the employee. Which order must be satisfied first?
- Child support order Correct Answer
- Creditor garnishment
- Whichever one the employer chooses
- Whichever one the employee chooses
The e-IWO process involves the electronic sharing of information between a state child support enforcement agency and an employer. This information sent and received through e-IWO may be new/original or amended withholding order information; file and receipt acknowledgement; termination of noncustodial parent’s employment; termination of order information; and lump sum payments.
For more information, refer to Module 3, Lesson 1
In the Electronic Income Withholding Order (e-IWO) process employers and state child support agencies can share all of the following information EXCEPT:
new, original, or amended withholding order information.
termination of noncustodial parent’s employment.
employer acknowledgement files.
work state administrative fee schedule.- Correct Answer
When receiving an out-of-state Income Withholding Order, employers follow the rules of the employee’s work state when determining the employer’s administrative fee, the maximum amount permitted to be withheld, the priority for withholding and allocating income for multiple withholding orders, and the time period to implement. Otherwise, follow the rules as stated on the order.
For more information, refer to Module 3, Lesson 1
When an employer receives an out-of-state child support order, the employer uses the employee’s work state when applying the following rules EXCEPT:
administrative fee deductions.
medical support implementation. .- Correct Answer
maximum deduction amount permitted.
time period to implement the withholding order.
The e-IWO process involves the electronic sharing of information between a state child support enforcement agency and an employer. This information sent and received through e-IWO may be new/original or amended withholding order information; file and receipt acknowledgement; termination of noncustodial parent’s employment; termination of order information; and lump sum payments.
For more information, refer to Module 3, Lesson 1
In the Electronic Income Withholding Order (e-IWO) process employers and state child support agencies can share all of the following information EXCEPT:
new, original, or amended withholding order information.
termination of noncustodial parent’s employment.
employer acknowledgement files.
work state administrative fee schedule. .- Correct Answer
Under the CCPA, an employer must withhold the lesser of the amount on the Income Withholding Order or the allowed percentage of the employee’s disposable earnings, based on the employee’s family status and arrearages found on the order, to satisfy the child support order or be subject to penalties for failing to withhold the child support.
For more information, refer to Module 3, Lesson 1
What action must an employer take when receiving a child support order?
Terminate the employee because of the deduction.
Tell the employee to resolve the issue with the state disbursement unit.
Make the deduction as required. .- Correct Answer
Discipline the employee because of the deduction.
Once an employer withholds employee taxes, any involuntary deductions, and any state deductions required by law, it has the responsibility of determining the priority of voluntary deductions to withhold from employees.
For more information, refer to Module 3, Lesson 2
Employers have the responsibility to choose the priorities of voluntary deductions. Voluntary deductions are deductions that are chosen by the employee, such as charitable contributions or health insurance premiums. Employers are not required to withhold these deductions, but they may choose to do so if the employee requests it.
The priorities of involuntary deductions are set by law. Involuntary deductions are deductions that are required by law, such as taxes and garnishments. Employers must withhold these deductions, and they cannot choose to prioritize them differently.
Here is the order of priority for involuntary deductions:
- Child support orders
- Federal, state, and local taxes
- Mandatory deductions, such as union dues
- Creditor garnishments
- Voluntary deductions, such as charitable contributions and health insurance premiums
