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  1. #1
    tim4romamfs is offline Junior Member
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    Exclamation 1099 self employed wage garnishment laws?

    What is the name of your state (only U.S. law)? I live in CA, I am a 1099 Independent Contractor for a said company. Child Support Agency has recently attached a wage assignment to the money this said company owes me. Are they allowed to do this? I have a few friends that are CPA's and they seem to be under the impression that Child Support can't do this due to my 1099 self employed status and the fact that these are not "wages". In other words I am NOT technically employed by this company. I am self employed. Plus I have not filed taxes on this money yet, so how could CSS take a percentage of my money prior to me filing taxes and calculating business expenses ect? Is this legal? Do I have any rights to stop them from doing this? I have no problem paying child support, but I would like to do this on my own, without them making things more complicated and confusing by taking my 1099 money before I have calculated taxes and business expenses.
  2. #2
    NotClueless is offline Member
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    Yes it is legal.
  3. #3
    Tooderbug is offline Junior Member
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    It is possible they imputed income from previous years and garnished your income according to what you should owe from past monies.
  4. #4
    TinkerBelleLuvr is offline Senior Member
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    toodled-ooo ... read the question.

    They are garnishing his contractor payments. The answer is THAT IS LEGAL. They can garnish up to 50%-65% of those payments.
  5. #5
    nextwife is offline Senior Member
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    Quote Originally Posted by Ginny J View Post
    toodled-ooo ... read the question.

    They are garnishing his contractor payments. The answer is THAT IS LEGAL. They can garnish up to 50%-65% of those payments.
    Wow. What if one's mark up is only 15-20%, like in my hubby's business? You'd LOSE money on every job you agreed to do if they garnished 50%-65%!!!!!!
  6. #6
    LdiJ is offline Senior Member
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    Quote Originally Posted by tim4romamfs View Post
    What is the name of your state (only U.S. law)? I live in CA, I am a 1099 Independent Contractor for a said company. Child Support Agency has recently attached a wage assignment to the money this said company owes me. Are they allowed to do this? I have a few friends that are CPA's and they seem to be under the impression that Child Support can't do this due to my 1099 self employed status and the fact that these are not "wages". In other words I am NOT technically employed by this company. I am self employed. Plus I have not filed taxes on this money yet, so how could CSS take a percentage of my money prior to me filing taxes and calculating business expenses ect? Is this legal? Do I have any rights to stop them from doing this? I have no problem paying child support, but I would like to do this on my own, without them making things more complicated and confusing by taking my 1099 money before I have calculated taxes and business expenses.
    Its a pretty big step for the CSE to take, to garnish contractor payments. That means you either have not been cooperating with the process of getting child support set, or you have not been paying your child support when you should.

    The CSE normally will not guarnish contractor payments if the person obligated to pay child support is cooperating and/or making their full payments, on time.
  7. #7
    ariastar is offline Member
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    If you can, get an attorney. Either you haven't been paying or the agency is being overly aggressive. When you're a contractor, you're self-employed and have your own expenses that need to be deducted from the money paid before you know what your real income is to be garnished.
  8. #8
    LdiJ is offline Senior Member
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    I do want to add something here. We don't know if he already had a child support order and that is what is being garnished, or if an order was set without his cooperation and that is being garnished.

    If child support was calculated with correct information, he expenses would already be accounted for in the amount ordered.
  9. #9
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    I just have to say WOW.. Florida will not garnish wages from self employers. Or should I say they would not and will not for my ex who is self employed and he is almost $10,000 in arrears. I say to bad I don't live in Cali.
  10. #10
    TinkerBelleLuvr is offline Senior Member
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    ConcerndStepmom,

    If the contractor is a "regular" contractor who sees a weekly/biweekly/semimonthly checks, I as an employer, am REQUIRED to garnish that check, whether it is an "employee" or a "contractor". It says that specifically on the garnishment orders that cross my desk.

    And yes, I am talking FLORIDA.

    Now, if it is just an occasional vendor check, it wouldn't see a garnishment from Florida. It comes under the radar when I've filed 1099-MISC with the IRS.
  11. #11
    CourtClerk is offline Senior Member
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    Quote Originally Posted by LdiJ View Post
    The CSE normally will not guarnish contractor payments if the person obligated to pay child support is cooperating and/or making their full payments, on time.
    This is not true as it relates to CA. Nowadays ALL new orders are being ordered to be paid to the State Disbursement Unit to keep everyone honest. If this is an order that is being enforced by CSSD, either because it started out there or because the CP turned the order over to them by enforcement, CSSD is going to go for wage assignments and garnishments FIRST, not last - even when someone is an IC.

    Oh... and yes, IC wages can be garnished per the family code.
  12. #12
    CourtClerk is offline Senior Member
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    Quote Originally Posted by ariastar View Post
    If you can, get an attorney. Either you haven't been paying or the agency is being overly aggressive. When you're a contractor, you're self-employed and have your own expenses that need to be deducted from the money paid before you know what your real income is to be garnished.
    You need to be quiet because you know not what you speak. All you did was repeat something you saw already posted here, and as I just said... that information was INCORRECT where CA is concerned.
  13. #13
    LdiJ is offline Senior Member
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    Quote Originally Posted by CourtClerk View Post
    This is not true as it relates to CA. Nowadays ALL new orders are being ordered to be paid to the State Disbursement Unit to keep everyone honest. If this is an order that is being enforced by CSSD, either because it started out there or because the CP turned the order over to them by enforcement, CSSD is going to go for wage assignments and garnishments FIRST, not last - even when someone is an IC.

    Oh... and yes, IC wages can be garnished per the family code.
    That doesn't bother me if child support was calculated based on tax returns and then they go ahead an garnish it from IC payments.

    However, if it somehow gets set based on IC payments, it could be grossly unfair. I have tax clients who have hundreds of thousands of dollars of IC payments, but after paying their employees and their business expenses, may only net 20% of that.
  14. #14
    CourtClerk is offline Senior Member
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    Quote Originally Posted by LdiJ View Post
    That doesn't bother me if child support was calculated based on tax returns and then they go ahead an garnish it from IC payments.

    However, if it somehow gets set based on IC payments, it could be grossly unfair. I have tax clients who have hundreds of thousands of dollars of IC payments, but after paying their employees and their business expenses, may only net 20% of that.
    That's something that needs to be brought up when they are dealing with the amount of support to be paid. The OP (and some of the posters here) seem to be missing that. Assuming he was always an IC, then CS was set based on the information the court had at the time. Whether or not he's already paid taxes on it (as he stated) is irrelevant, most people pay their support via wage assignment before they pay taxes on their paycheck.
  15. #15
    LdiJ is offline Senior Member
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    Quote Originally Posted by CourtClerk View Post
    That's something that needs to be brought up when they are dealing with the amount of support to be paid. The OP (and some of the posters here) seem to be missing that. Assuming he was always an IC, then CS was set based on the information the court had at the time. Whether or not he's already paid taxes on it (as he stated) is irrelevant, most people pay their support via wage assignment before they pay taxes on their paycheck.
    I think I touched on that topic earlier when I mentioned that possibly OP's problem stemmed from not cooperating with the CS process.

    However, I am going to disagree with the bolded part. Under federal law, garnishments have a maximum set percentage of the paycheck AFTER TAX. In other words, the net rather than the gross paycheck. I know this from having been an employer/CFO for many years. Therefore there is some possibility of unfairness in garnishing IC income, even if the child support was calculated fairly.

    In fact, if I were someone subcontracting work, and being required to garnish IC income, I would be nervous about violating federal law regarding garnishments, in obeying CS garnishments.

    A true IC payor, has no idea what their subcontractor's net income is. They have no idea what their subcontractor's payroll expenses and business expenses are. Therefore they could easily violate federal law by garnishing more than federal law allows.

    Of course, if they are improperly treating their employees as subcontractors, which is all too common these days, and all too ILLEGAL then they wouldn't have to worry about violating federal garnishment law...sigh...it would be easy to figure out.

    As an accountant, and as a tax professional, and as someone who has been an employer or has been responsible for following federal law as CFO for a company, I am extremely uneasy about the idea of garnishing IC income.

    As a taxpayer however, I am glad to see that IC income is also being garnished for CS.

    However, it is a real catch 22.

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