This notice is sent to inform an employer that a taxpayer who works for them has an unpaid tax liability. Since the taxpayer did not pay the tax liability in full, the employer is responsible for collecting the unpaid total liability from their employee's wages. The tax liability is final and collectible.
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Wage garnishments are deducted from a taxpayer’s wages, salaries, or other funds (bank deposits, royalties, rent, etc.) The employer, or other garnishee, must make garnishment payments at least every 30 days until the total liability is paid in full. The employer, or other garnishee, can make garnishment payments online or by mail.
The amount the employer, or other garnishee, should deduct depends on the type of financial relationship the employer has with the taxpayer.
- If the employer reports the taxpayer’s wages on a W-2, then deduct 10% of the taxpayer’s gross wages or salaries from each paycheck. Only wages and salaries are subject to the 10% limitation. By NC law, you cannot deduct more than 10% of a taxpayer’s monthly gross wages or salaries.
- If the employer reports contract payments on a 1099, then collect 100% of the taxpayer’s contract payments, up to the amount of the total liability detailed in the notice.
- If the employer collects other types of funds (bank deposits, rent, royalties, etc.), then collect 100% of these funds up to the amount of the total liability detailed in the notice.
The employer, or other garnishee, will receive a garnishment release letter once the garnishment has been paid in full.
Review the garnishment FAQs for more details about the responsibilities of an employer or taxpayer. If you have additional questions, call 1-877-252-3252 or 1-888-352-0116.
Because the employer has a financial relationship with the taxpayer, the employer is responsible for the total liability. If the employer does not make garnishment payments, then the employer will receive a notice of proposed assessment for the tax, penalties, and interest due. (See G.S. 105-241.9)
The employer should mail or fax a completed Separation of Employment Notification Coupon, or the garnishment letter or notice with the detailed information to:
- Mail: Garnishment and Payment Processing Unit, PO Box 27431, Raleigh, NC 27602-1168
- Fax: 919-733-1231