Child Support Income Withholding: Reporting Requirements
Child Support Income Withholding: Reporting Requirements
Child Support Income Withholding
When a parent falls behind on their child support payments or the child support orders ask for income withholding, the Division of Child Support (DCS) at the Washington State Department of Social and Health Services can issue an Order/Notice to Withhold Income (OWI) to the non-custodial parent's employer. This order requires the employer to withhold a portion of the employee's wages and send it directly to the Washington State Support Registry to be applied toward the child support obligations.
Upon receiving the OWI, the employer is legally obligated to comply. They must begin withholding the specified amount from the employee's paycheck and forwarding it to the state within seven business days of each pay period. The garnishment continues until the past-due amount is paid in full or the court modifies or terminates the order.
Employers Must Report Lump Sum Payments & Bonuses
In Washington, income withholding includes not just regular wages but also bonuses and lump sum payments. This comprehensive approach ensures all forms of compensation are considered for child support obligations.
The DCS has established guidelines for employers regarding the reporting of lump sum payments. Any lump sum payment exceeding $500 must be reported to DCS. This threshold helps focus on significant payments that could substantially impact child support arrears. However, employers have the option to report payments below $500 or even payments of unknown amounts, demonstrating the system's flexibility in capturing various compensation scenarios.
The types of lump sum payments that fall under this reporting requirement include the following:
- Vacation/holiday pay cash-out options
- Sign-on bonuses
- Severance packages
- Retroactive pay increases
- Performance bonuses
- Commissions
- Cash service awards
- Bonuses
Employers are encouraged to report lump sum payments as close to the payout date as possible. This prompt reporting allows DCS to provide the most accurate and up-to-date past-due child support balance. Upon receiving a report, DCS has up to 14 days to respond to the employer with instructions on whether the lump sum should be garnished and, if so, how much should be withheld.
To ensure fairness and consistency with regular wage garnishment, the 50% limitation on withholding still applies to these lump sum payments. This means that no more than half of the payment can be garnished for child support, protecting the employee's ability to meet other financial obligations. IF DCS fails to respond to an employer on the 15th day, the employee can receive the remaining half of their bonus.
Washington state's inclusion of bonus and lump sum payments in child support income withholding demonstrates a thorough approach to ensuring children receive necessary financial support. It balances various interests while emphasizing employer cooperation in the reporting and withholding process.
For employees subject to child support orders, this system emphasizes the need to be aware that all forms of compensation may be considered for garnishment. It encourages open communication with employers about upcoming bonuses or other lump sum payments to avoid surprises and allow for financial planning.
Questions About Child Support or Income Withholding?
McKinley Irvin serves clients throughout Washington. Our attorneys can help those dealing with child support issues, such as whether income withholding is something to consider and how it works. We can also help file an initial child support petition or modification request. Reach out for more information.
