Frequently Asked Questions about Garnishments
A bank garnishment is a legal document. It requires a bank or financial institution to put a hold on an account and deduct 100% of the funds in the account, up to the amount shown due on the notice.
Vendor garnishments are legal documents used when a state vendor has an unpaid tax liability. Payments to a state vendor can be electronically redirected to pay a delinquent, or unpaid, state tax liability. State vendors are individuals or businesses that provide services to any state agency.
Before paying a state vendor, that payment is matched against outstanding tax liability.
When there is a match, then funds are deducted from the payment before it is sent to the vendor.
Vendor garnishments cannot be released.
If you have questions, or need more information, call 1-877-919-1819, extension 1120407.
A wage garnishment is a legal document sent to employers when a taxpayer has an unpaid tax liability. It requires them to withhold funds from the taxpayer’s wages, salaries, or non-wage payments (contract payments, commissions, rents, royalties, etc.).
Employers must submit those funds to the Department to pay that unpaid tax liability.
- The percentage amount deducted depends on the type of funds.
- A NC wage garnishment runs at the same time as other types of garnishments.
- Other wage garnishments do not offset a NC garnishment.
Wages and salaries are any amounts paid to an employee that would typically be reported on a W-2.
Yes. These amounts are not subject to the 10% limitation. The full amount (100%) of these types of payments may be garnished, up to the amount of unpaid tax liability shown as due on the notice.
For example, an employee of a bank may also have deposit accounts at the bank. In this case, the bank must remit 100% of any deposits to the Department. Also, the bank must withhold 10% of the employee’s gross salaries or wages until the unpaid tax liability is paid in full.
Wage garnishment deductions should begin with the next payroll cycle. Check with your payroll for verification.
Bank garnishment activity on an account typically starts before the taxpayer receives the notice. But each bank or financial institution has different policies about bank garnishments. Check with your financial institution for specific times and dates.
A wage garnishment is released when the total liability is paid. Payment of the total liability releases a wage garnishment. The Department mails wage garnishment release letters to the employer.
If an additional balance accrues on a delinquent account, the Department may issue another garnishment.
If the Department issues a garnishment in error, it is released upon verification.