Alimony Wage Garnishment PreTax via ADP

[northernnj]

My payroll department will be receiving (if not already) an order to garnish my alimony and child support payments. The alimony alone is 66% of my gross. Having this deducted post-tax will result in a HUGE amount of income withheld (unless I work the system and claim a gazillion deductions). I'd rather not and prefer to have the alimony garnishment withheld pretax as I believe is entitled.

I've found most payroll departments may not do this as it is complicated for them. Ours uses ADP and I'd expect they can figure out how.

My payroll department has suggested I provided whatever material i can do show deducting the alimony pretax is permissible and they'll then instruct ADP to do so...

I'm searching and searching... any change anyone has, knows or can help direct me to anything relevant? My biggest concern, is the income is withheld, hopefully so I can get it as a refund at end of year, but that just leaves another opportunity for the ex to try work the system to get access to that portion directly from the government... I'd rather avoid that potential in the future...

[minuette]

If your payroll dept is iffy about deducting alimony pre-tax:

You can visit the IRS Withholding Calculator at http://www.irs.gov, which will give you a good estimate of your 2012 tax liability and the recommended filing status and number of allowances to claim on the W-4.

You can cross-check the IRS reccomendation and get more detailed information about the impact on your net pay with http://www.paycheckcity.com. The calculators are simple to use and the Form W-4 Assistant will walk through a general recommendation for withholding similar to the Withholding Calculator.

[Thermite]

My payroll department will be receiving (if not already) an order to garnish my alimony and child support payments. The alimony alone is 66% of my gross.

While I don't have advice for your specific question, I just gotta ask, how is this possible? How can they take 66% of your gross income for just alimony? I'm assuming you're paying at least 25% in taxes, so that leaves you with 9% of your income to cover child support and living expenses? Child support in my state starts out at 20% of net. Did you work out some kind of deal wrapping up child support as alimony so you could get the tax deduction or something? I thought there was a Federal law saying they could not garnish more than 64 or 65% of your income for CS and SS. Can you give us more details?

[Chris A]

I'm not a pro at this but any state refunds you get are added to next years gross and considered income. Just something to watch for.

[northernnj]

My payroll department will be receiving (if not already) an order to garnish my alimony and child support payments. The alimony alone is 66% of my gross.

While I don't have advice for your specific question, I just gotta ask, how is this possible? How can they take 66% of your gross income for just alimony? I'm assuming you're paying at least 25% in taxes, so that leaves you with 9% of your income to cover child support and living expenses? Child support in my state starts out at 20% of net. Did you work out some kind of deal wrapping up child support as alimony so you could get the tax deduction or something? I thought there was a Federal law saying they could not garnish more than 64 or 65% of your income for CS and SS. Can you give us more details?

There was no deal; the matter is being appealed, and the judge, at least according to several attorneys, made some critical procedural errors (including this one).

[minuette]

I'm not a pro at this but any state refunds you get are added to next years gross and considered income. Just something to watch for.

Not necessarily.

If a taxpayer files a 1040 with a Schedule A and claims a deduction for state income taxes, the state refund for that year might need to be claimed the following year in full or in part (there's a worksheet one uses in such cases to calculate the amount to include as income on the 1040).

If a TP claims general sales taxes on the Schedule A instead of state income taxes, none of the state refund needs to be included in income.

If a TP claims the standard deduction instead of itemized deductions, none of the state refund needs to be included in income.

[northernnj]

Update:

While I am still pursuing having ADP adjust the withholding based on the gross income minus alimony payment withheld, it looks like this is an uphill battle.

Here's what I'm thinking I'll do; looking for thoughts on this.

Lets say my income before any wage garnishment is, lets say $1000. Witholding amounts are calculated today based on one execemption (fed and state). Let's say $300 is withheld.

If wage garnishment for alimony is $300, then withholding *should* be based on gross income of $700.

If I use the withholding calculators online (ADP, paychecks.com, etc.) I can determine the approximate amounts of withholding based on $700 gross.

I expect (correct me here, please) I could then just adjust my exemptions on my gross of $1000 until the withheld amounts approximate what was seen above with a gross of $700. -- This making sense?

Based on the above, I've gotta declare 14 federal exemptions and 30 state exemptions!!! Is this crazy or is this what others end up doing?

[anonymous guest]

That is what I would have done. Once you get the witholding figured out and get a steady paycheck you can change your exemptions again.
Just make sure you revisit it, so you don't get a huge IRS bill next tax season.