People use "levy," "garnishment," and "seizure" interchangeably. The IRS uses one word, levy, for several very different tools. The two most common are the bank levy and the wage levy.
They come from the same statute, IRC § 6331, and follow the same pre-levy notice rules. After that, they part ways. If you understand how, you know how much time you have, what the IRS can take, and which arguments will actually move the needle.
The forms
The IRM assigns the forms by property type (IRM 5.11.2.2.2):
- Form 668-A, Notice of Levy, for property a third party holds, including bank accounts and business receivables.
- Form 668-W, Notice of Levy on Wages, Salary, and Other Income, for an individual's wages, salary, fees, bonuses, commissions, and similar income, and also benefit or retirement income.
Publication 1494, Tables for Figuring Amount Exempt from Levy on Wages, Salary and Other Income, is mailed with the Form 668-W. The IRM refers to the employee's Statement of Exemptions and Filing Status, which the employer uses to compute the exempt amount.
Side by side
| Bank levy | Wage levy | |
|---|---|---|
| Form | 668-A | 668-W |
| Duration | One time: funds on deposit when served (§ 6331(b); Treas. Reg. § 301.6332-3(c)(3)) | Continuous until released (§ 6331(e)) |
| Waiting period | 21 days before the bank pays (§ 6332(c)) | None; employer pays from each paycheck |
| Exempt amount | None once money is in the bank (IRM 5.11.4.6) | Yes, under § 6334(a)(9) and (d) |
| Cap | Amount on the levy | Amount on the levy, collected over time |
| Special release rule | General § 6343(a) grounds | Also § 6343(e): release when agreed not collectible |
| Collection statute | A levy served before the statute expires stays enforceable | Must be released when the statute expires (Treas. Reg. § 301.6343-1(b)(1)(ii)) |
The wage levy exempt amount
IRC § 6334(a)(9) exempts wages and other income up to an exempt amount. Section 6334(d) computes the weekly exempt amount from the standard deduction plus an amount for dependents, divided by 52, for the year the levy occurs. For years when the personal exemption amount is zero, § 6334(d)(4) substitutes a dependent amount that started at $4,150 per dependent and is adjusted for inflation after 2018. If you do not file a verified statement, the employer must treat you as married filing separately with no dependents (§ 6334(d)(4)(D)), which usually produces the smallest exemption.
The exact dollar figures change each year with the standard deduction. Use the current Publication 1494 for the year your levy is in effect.
There is a second wage-related exemption worth knowing: § 6334(a)(8) exempts the portion of wages needed to comply with a court judgment for support of minor children entered before the levy.
Why a bank levy can hurt more in the short run
The wage exemption protects some of every paycheck at the employer. Once the paycheck lands in your checking account, the protection is gone. IRM 5.11.4.6 says it plainly: "Once income is deposited in a bank, there is no exempt amount."
So a bank levy can take your entire paycheck in one shot, if it was in the account on the day of service. That is exactly why the same IRM section tells employees to consider releasing all or part of a bank levy when an entire paycheck is deposited, to avoid economic hardship. See economic hardship release.
Why a wage levy can hurt more in the long run
A bank levy is a snapshot. New deposits after service are not caught (IRM 5.11.4.4). A wage levy is a subscription. Under § 6331(e), it is continuous from the date first made until released under § 6343. Every pay period, the employer sends the non-exempt portion until the debt is paid, the levy is released, or the collection statute runs.
The IRS also has a continuous levy for certain federal payments, such as Social Security, under § 6331(h), capped at 15 percent of each payment for most recipients. See Social Security deposits and bank levies.
Time to respond
With a bank levy, you get 21 days before the bank pays. Many bank levies are fixed inside that window. See the 21-day hold.
With a wage levy, there is no comparable hold. The first deduction can come on the next payday. But the IRM says that when a wage levy causes hardship, the IRS should release it immediately so the employer does not send the next payment (IRM 5.11.2.3.1), and it gives examples of partial wage levy releases that let the taxpayer keep a set amount (IRM 5.11.2.3.4).
Release rules
Both levies are released under the five grounds in § 6343(a)(1): satisfied or unenforceable liability, release facilitating collection, an installment agreement, economic hardship, and value exceeding the debt. See how to get a bank levy released.
Wage levies have one more. IRC § 6343(e): "In the case of a levy on the salary or wages payable to or received by the taxpayer, upon agreement with the taxpayer that the tax is not collectible, the Secretary shall release such levy as soon as practicable."
The collection statute treats them differently too. Under Treas. Reg. § 301.6343-1(b)(1)(ii), a continuing wage levy must be released at the end of the § 6502 collection period. A bank levy served before the period ends remains enforceable even if the bank pays after it (IRM 5.11.2.3.1.2). See the collection statute and bank levies.
Who gets the paperwork
A bank levy is served on your bank, and you get a copy, often through Form 8519 for centrally printed levies (IRM 5.11.2.2.7). A wage levy is served on your employer, which means your employer's payroll department learns about your tax problem. That is one more reason people try hard to resolve things before a wage levy issues, and one more reason to answer the CDP notice when it arrives.
What the difference means for strategy
- If your bank was levied, the clock is 21 days and the fight is usually about release or partial release of a fixed sum.
- If your wages were levied, the fight is about the ongoing amount: getting a payment plan in place so the levy is released, or showing that the levy creates hardship.
- If both happened, fix the levy that hurts most first, then get a levy-restricting status in place (a pending installment agreement or offer under § 6331(k), or a timely CDP request under § 6330) so neither one repeats.
A bank levy is a punch. A wage levy is a squeeze. You defend against them differently.
If you are dealing with a wage levy right now, the firm's guide on stopping an IRS wage garnishment covers the employer side.