Tennessee Child Support Garnishment Limits, Exemptions and Protections
While a noncustodial parent in Tennessee must consider any source of income as subject to child support collections, some of this income is exempt from Tennessee wage garnishment law. To determine these exemptions, an employer must follow the guidelines of both the Consumer Credit Protection Act (CCPA) and Tennessee’s own garnishment limits. Tennessee garnishment law is more favorable to the noncustodial parent than the CCPA: Tennessee law allows more deductions to be made when determining the protected income, and also provides higher overall protection thresholds. The following article is meant to help provide an understanding of Tennessee garnishment exemptions, as well as how to allocate and prioritize payments when there is not enough allowable income to go around.
Garnishment Limits and Exemptions
To determine the employee’s income that is exempt from withholding, the employer must first follow the Consumer Credit Protection Act (CCPA). Under the CCPA, disposable earnings are found by subtracting the legally required deductions from the employee’s total earnings. The CCPA limits these deductions to income taxes, Social Security and Medicare, mandatory deductions for public employee retirement systems or the Railroad Retirement Act, or state unemployment and disability insurance. In addition to these deductions, Tennessee also requires that the employer deduct premiums for health care attributable to child support when determining disposable earnings. Once the disposable earnings have been calculated, Tennessee law permits only 50% of the disposable earnings to be deducted for withholding orders. The CCPA limits are higher, but the employer must follow Tennessee state law since it is more favorable to the employee.
Allocation and Priority
When an employer is served with more than one order of support for the same employee, they may not withhold more than the Tennessee withholding limits allow, even if the total payments exceed this amount. In these cases, the employer should allocate the current support first, based on the ratio of each payment to the total allowable disposable earnings. If there is money left to make payments, the employer should pay arrearages, spousal support, and medical premiums, in that order.
When an employer is served with an order of support and another type of withholding order for the same employee, they still may not deduct more than the Tennessee withholding limits allow. In this case, if the other withholding order is issued by a state, or is a Chapter 13 bankruptcy repayment order, the employer should withhold for the support order first. If the employer receives an IRS-issued tax levy for the employee, however, they should withhold for the IRS order first. Note that the IRS is often willing to accommodate support orders, so if there are not enough allowable disposable earnings to cover all payments, the employer can contact the IRS. Should the IRS agree to the accommodation, the employer is best advised to get the agreement in writing and go on to contact the agency or court that issued the support order about the existence of the tax levy.
Protection from Discrimination
It is a Class C misdemeanor for an employer to discriminate against an employee or prospective employee on the basis of a support order. Any employer found liable will be subject to a fine to be determined by the Tennessee courts.