The IRS Can Garnish Your Social Security — Here's How Much

If you aren’t paying Uncle Sam the taxes you owe, you could get a smaller Social Security benefit.

The Federal Payment Levy Program allows the government to automatically collect up to 15% of your benefits. Some benefits are excluded, such as the Supplemental Security Income. The levy can continue until the debt is paid. Here’s what to know, and how you can protect your benefits.

How the Federal Payment Levy Program works

The Federal Payment Levy Program lets the IRS garnish up to 15% of your Social Security payments. For instance, if you receive $2,200 per month in Social Security benefits, the IRS can take $330 per month until the debt is fully paid.

“Before your Social Security benefits are included in the FPLP, we will send you a final notice of our intent to levy, with appeal rights, if one has not already been issued,” the IRS says via its website. If the agency doesn’t hear from you, you’ll get an additional notice explaining that your Social Security benefits may be levied. You’ll have 30 days to make arrangements to pay the tax debt before the collections start.

How do you end up with tax debt?

You can end up with tax debt if you don’t pay your taxes in full by the filing deadline.

There are several ways this can happen. For example, if you withdraw money from a 401(k) or individual retirement account (IRA) early without setting aside money for the 10% penalty and income taxes you’ll owe, you may end up with tax debt.

People who made an investment transaction that resulted in significant capital gains may also be at risk of garnishments if they miscalculated how much they owed at the time. Surviving spouses may have inherited tax that they need to be aware of. These scenarios highlight that garnishments can happen to people who made honest mistakes. It’s important to carefully review your finances each year when filing taxes to ensure you do not end up with tax debt.

How to stop or prevent a Social Security levy

If your Social Security is being garnished, take action ASAP since those levies will continue until the debt is paid.

If money is tight to the point that the levy is causing you immediate economic hardship, you can request a hardship exemption that could result in the expedited release of your garnished benefits.

“A levy release does not mean you are exempt from paying the balance,” according to the IRS. “The IRS will work with you to establish payment plans or take other steps to help you pay off the balance.”

That could include creating a payment plan with the agency to pay off your debt over time or settling your taxes for less than you owe via an offer in compromise, if you qualify. You may also be able to temporarily delay collection until your financial situation improves.

To get started, the IRS says you can scan a QR code on your notice, call the number on your notice or 800-829-1040, or make an appointment at a local IRS assistance center. Depending on your situation, it may also make sense to consult a tax professional.