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Administrator Guide
Last Updated: 2023-06-23
Record a Federal Tax Levy Withholding Order (USA)

Record a Federal Tax Levy Withholding Order (USA)

Record a federal tax levy withholding order to begin automatic deductions during payroll processing.
  1. Access the
    Record US Withholding Order for Worker
     task.
  2. Enter the
    Worker
     name and select the
    Federal Tax Levy (USA)
    Order Type
    .
    Workday dynamically displays the fields required for this type of withholding order.
  3. Complete the
    Order Info
     fields on the right side of the page. Some of these fields are unique to federal tax levy withholding orders. As you complete this step, consider:
    Option Description
    Issued In
    Defaults to
    Federal
    .
    Deduction Recipient
    Select the third-party recipient of the withholding deduction. If the deduction recipient isn't set up in Workday, select
    Create
     to add the recipient.
    Part 3 Effective Date
    For federal tax levies. Workday uses the chart in Publication 1494 for the year you enter here.
    Marital Status
    For federal tax levies. Worker's marital status from Part 3 of Form 668-W (Notice of Levy on Wages, Salary, and Other Income). This can differ from the worker's marital status on Form W-4.
    Personal Exemptions
    Enter the number of personal exemptions from Part 3 of Form 668-W.
    Additional 65+ or Blind Exemptions
    Enter the number of personal exemptions from Part 3 of Form 668-W.
    Exemption Amount Override
    Applies to federal tax levies and state tax levies in:
    • Arizona.
    • Kentucky.
    • Virginia.
    Exemption Frequency
    Applies to federal tax levies and state tax levies in:
    • Arizona.
    • Kentucky.
    • Virginia.
    Pay Period Exemption Amount
    Applies only to federal tax levies. Enter the pay period exemption amount from Form 668-W.
    If Part 3 effective date is before 2007-01-01, Workday calculates this amount as equal to the exemption amount override multiplied by the pay period frequency divided by the exemption frequency.
    Block Tax Election Changes in ESS
    Applies only to federal tax levies. When selected, employees can no longer use the
    Withholding Elections
     task to change their tax elections. Administrators can still make updates using the
    Add Worker US Tax Elections
     task.
    Termination Date
    Applies only to federal tax levies. Enter the termination date of the levy from Form 668-D (Release of Levy/Release of Property from Levy). Entering a termination date is the only way to stop withholding for a federal tax levy.
    Memo
    For information only. Use this field to document additional details for this IWO.
  4. Complete the fields on the
    Persons Claimed as Personal Exemptions
     tab. Enter dependents claimed as personal exemptions.
    Enter the name and Social Security Number for each dependent claimed. They can't be the same as the dependents included in a child support order.
  5. On the
    Attachments
     tab, select relevant attachments.
  6. The
    Restrictions for Disposable Earnings
     tab applies only to federal tax levies that use baseline deductions. Use fields on this tab to manage baseline and future deductions that affect the federal tax levy deduction calculation.
    As you complete this step, consider:
    Option Description
    Current Deduction Restrictions
    Applies only to federal tax levies. Displays a detailed list of the current deductions and overrides used to calculate disposable earnings. The information becomes available when you establish baseline deductions.
    Deduction Restriction Overrides
    To prevent changes to voluntary employee deductions from impacting disposable earnings, add deduction restriction overrides. Select the deduction and 1 of these override options:
    • Amount
      : The allowable amount for the deduction.
    • Percent
      : The allowable percent for the deduction. This option is only available when the deduction is a benefit calculated as a percent.
    • Never Reduces DE
      : Select to exclude the deduction from the disposable earning calculation.
    • Always Reduces DE
      : Select to include the deduction in the disposable earnings calculation without limiting the amount.
    When deduction amounts are greater than override amounts, Workday subtracts the difference from take-home pay, not disposable earnings.
    Baselined Deductions
    Select
    Load Deductions
     to create a baseline list of deduction as of the effective date. This baseline can help you determine whether future changes in the deductions are allowable in the calculation of disposable earnings.
    For new federal tax levies, establish this baseline when the levy starts. After you load deductions the first time, you can verify them, make adjustments to them. However, after you complete payroll with baseline deductions in place, you can no longer change the baseline. It serves as a record of the deductions in place when the levy took effect. Instead, use deduction restriction overrides to make changes.
    Workday can't correctly load baseline deductions when an employee has:
    • A midperiod pay group change.
    • Current payroll input
    • An adjustment override for percent-based deductions.
    In these cases, add deduction restriction overrides to accurately reflect the deductions to include in the disposable earnings calculation.
    For existing federal tax levies with completed payroll results, you can't load baseline deduction restrictions. Instead, use deduction restriction overrides to accurately reflect the deductions present when the levy took effect.
Create ID Definitions and Sequence Generators
FAQ: Withholding Orders (USA)
Reference: Edit Tenant Setup - Payroll