Can the IRS Garnish Social Security? What About SSDI and SSI?
Social Security benefits are one of the most protected forms of income from creditors:
- Your credit card company cannot garnish your Social Security benefits.
- Your mortgage company cannot garnish your Social Security benefits.
- If you have outstanding medical debt, your Social Security benefits cannot be garnished for that.
- If you are sued for something big — like wrongful death, for example — and you lose, and whoever sued you gets a judgment against you, they still cannot touch your Social Security benefits.
And not only are these payments themselves protected from garnishment before they hit your bank account, but they are also protected from levy after they hit your bank account, assuming you get your benefits direct deposited rather than on a Direct Express card or something like that.
If a creditor tries to garnish money in your bank account, your bank has to look at your past two months’ of account history to see if you received any Social Security benefits direct deposited to the account, and if you have, the bank is obligated to protect two months’ worth of that money and let you use it.
Note that if you receive paper checks, most of the time the bank won’t protect you there, and your entire balance could be levied, and you’d have to go to court to prove that some of your Social Security was garnished.
So it usually makes sense to get a direct deposit rather than a paper check for a variety of reasons because it’s almost guaranteed in that case the bank will protect at least two months’ worth of your Social Security benefits.
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When Social Security Benefits Can Be Garnished
However, there are two exceptions to the wall of protection that is generally afforded Social Security benefits; there are two kinds of creditors that can take your Social Security payments before they hit your bank account.
Exception number one is an individual with a judgment against you for child support or alimony.
And the other exception is the federal government.
These exceptions apply to Social Security retirement income and SSDI (Social Security Disability Income), but they do not apply to SSI (Supplemental Security Income) — SSI income cannot be levied or garnished, even for child support, alimony, or by the federal government under Internal Revenue Code Section 6334(a)(11)(A), which exempts from levy:
Any amount payable to an individual as a recipient of public assistance under title IV or title XVI (relating to supplemental security income for the aged, blind, and disabled) of the Social Security Act
But regular, old Social Security — the money you can start collecting from the government as early as age 62 if you have at least 40 credits (basically 10 years of work in most cases) — can be garnished for child support, alimony, or federal government debts.
Can the IRS Garnish Social Security?
Yes, the IRS can garnish Social Security, but there are some things you can do about it.
And I’m going to tell you what they are at the end of this article.
But first, I want to tell you how an IRS Social Security garnishment — or levy — works, step by step, as well as how much the IRS can garnish your Social Security for (and it’s actually potentially a greater amount than your other federal government debts).
IRS Social Security Levy Explained
So any IRS levy starts with an unpaid tax debt.
So let’s say you file a tax return — or the IRS files an SFR for you because you have unfiled tax returns — that indicates a certain balance due.
What’s the IRS going to do? Well, first, they’re going to process your tax return. If you e-filed it, it should take a few weeks — no longer than a month if there’s nothing amiss about your return.
Between one and two months after that — typically five or six weeks — the IRS will probably send you a CP14 Notice. This is the “Balance Due and Demand For Tax Notice.”
This is one of the most common notices the IRS sends, and it basically informs you of the amount of your unpaid taxes, penalties, and interest the IRS believes you owe and it requests that you pay this amount within 21 days of the date of the notice (10 days if the amount the IRS believes you owe is $100,000 or more).
Then if you have not paid the tax on the CP14 and have not otherwise responded to the CP14, then five or six weeks later, the IRS will typically send you a CP501, which looks kind of like the CP14 and essentially says the same thing.
And this CP504 mentions something that the other notices may have not mentioned.
And that is that the IRS intends to levy, that is, seize, first your state tax refund and then if that state tax refund doesn’t satisfy your federal tax debt, other property as well.
And then if you don’t do anything after receiving the CP504, you’ll wait another five or six weeks, and you should be getting the LT11 in the mail — used to be Letter 1058s, but now we see LT11s far more often.
This is your final warning that the IRS is about to take your stuff if you don’t pay up or request a CDP hearing within 30 days or otherwise deal with this problem, and on the left-hand side of the first page of the LT11, you will see a tidy list of the potential things the IRS could take. And what is that last one? “Social Security benefits.”
How Much of My Social Security Can the IRS Garnish?
The IRS can automatically garnish up to 15% of your Social Security benefit amount automatically through the Federal Payment Levy Program (FPLP).
So if you receive $1,000 in Social Security benefits per month, the IRS can garnish up to $150 of those benefits per month.
Now, this automatic levy only applies to Social Security benefits — not SSDI and not SSI.
SSI cannot be levied at all as discussed previously.
SSDI, on the other hand, can be levied but only under a manual levy — not through the IRS’s automatic levy program.
And even some straight-up Social Security payments can be exempt from levy, such as benefits paid to children for example.
But the general rule for the majority of people collecting Social Security is that you can see the IRS automatically garnish up to 15% of your monthly benefit.
Note that with federal tax debt, there’s no protection of your first $750 of Social Security income per month; for other government debts, the first $750 of your monthly Social Security payment is protected from levy, but this is not the case with federal income tax debt.
15% of your monthly benefit amount can be levied even if the levy causes the amount left over to you to be less than $750.
Now, before the IRS starts taking your Social Security, it will send you Notice CP91.
So after the 30 days mentioned in the LT11 I mentioned previously — assuming you don’t deal with the issue or file for a CDP hearing during those 30 days — your stuff becomes fair game for the IRS to take.
And keep in mind that the IRS may or may not go after all leviable income and assets at once.
But you can be sure that they will send you a CP91 Notice in the mail before they start garnishing up to 15% of your Social Security benefits.
Note that if you owe business tax debt to the federal government, and the IRS has the right to collect it from you personally, it will send you a similar notice, the CP298 Notice, rather than the CP91 Notice.
What To Do If the IRS Is Garnishing Your Social Security
If the IRS is garnishing your Social Security income — or you believe they are going to garnish your Social Security income imminently — you need to act quickly.
If it’s come to this point, chances are the IRS’s position is that it’s given you enough time to deal with this problem, but since you haven’t, they’re going to take what they believe is theirs.
So here’s a step-by-step guide on what to do if the IRS is garnishing your Social Security benefits.
For more information about each of these steps, check out our article How to Fight the IRS and Win.
Step 1: Check the CP91 Notice for accuracy.
It shouldn’t be any surprise to you that the IRS can make mistakes from time to time, so be sure to review the IRS’s calculations on the CP91 Notice and make sure that everything looks accurate to you.
Step 2: Correct any errors with the IRS.
If you find something you disagree with, take it up with the IRS.
The CP91 Notice itself provides you with the phone number you should call if you disagree with something in the notice.
Obviously, getting through to the IRS right now is very difficult, so feel free to reach out to us at 866-8000-TAX if you’d like us to get through to the IRS for you — our staff is on the phone with the IRS all day.
Step 3: Seek Penalty Abatement.
Now that you’ve checked the CP91 Notice for accuracy and either 1) found it to be accurate or 2) corrected any inaccuracies with the IRS, you should at least try for penalty abatement.
Penalty abatement is a big topic, and we’ve covered it in depth in this article.
Step 4: Pay the Balance Due OR Seek Tax Relief
At this point, you and the IRS should be in agreement as to how much you owe (assuming there’s still a balance remaining after you’ve taken steps 1-3).
Now you have to figure out how to deal with this balance.
First, you probably want to determine if you qualify for an offer in compromise. This is an agreement with the IRS to settle your debt for less than you owe.
If you don’t qualify for an offer in compromise, you have other options:
- Obtain a temporary pause on having to pay the IRS what you owe based on hardship — this is known as currently not collectible status.
- Set up an installment agreement with the IRS.
- Pay off your balance in full to avoid any future accrual of penalties and interest.
For an overview of how tax relief works, read our article What Is Tax Relief and How Does It Work?.
Social Security Garnishment FAQs
Here are some commonly-asked questions when it comes to the IRS taking Social Security payments.
Can Social Security be garnished for state taxes?
No, Social Security cannot be garnished for state taxes.
Social Security, can, however be garnished for federal taxes.
Can the IRS take my Social Security back pay?
Yes, the IRS can take your Social Security back pay.
However, SSDI is no longer subject to an automatic garnishment, so it would have to be manually levied.