Many people wonder if they can receive Social Security benefits if they owe money to the IRS. The short answer is yes, in most cases the IRS cannot garnish your Social Security payments. However, there are some important caveats to understand.
Can the IRS garnish Social Security benefits?
In general, Social Security benefits are protected from IRS garnishment. This is because the Social Security Act forbids the government from subjecting benefits to “execution, levy, attachment, garnishment, or other legal process.”
There are a few exceptions where the IRS can garnish Social Security payments:
- If you owe federal taxes and have an IRS lien against your property
- If you owe child support or alimony payments
- If you owe student loan debt that is in default
Outside of these specific situations, the IRS cannot take a portion of your Social Security benefits to collect unpaid taxes you owe. Your Social Security income remains protected.
Can the IRS put a levy on your Social Security benefits?
As mentioned above, the IRS is generally prohibited from levying Social Security payments. However, they can levy benefits in certain circumstances:
- If you have an IRS tax lien – A federal tax lien gives the IRS the legal right to levy your property to pay off a tax debt. This includes Social Security benefits.
- If you are subject to criminal fines or restitution – The IRS can levy benefits to collect criminal fines imposed in federal court, including restitution or bail bond obligations.
In these specific situations, the IRS can legally impose a levy on your Social Security benefits to collect unpaid debts you owe to the government.
When can the IRS garnish benefits?
The IRS can only garnish your Social Security payments if:
- You have an unpaid tax obligation that has been assessed by the IRS
- Notice and demand for payment was properly provided by the IRS
- You neglected or refused to pay the tax debt
- The IRS filed a federal tax lien against your property
If you owe back taxes but have not received an IRS notice or lien, your benefits should be protected from garnishment. The IRS must formally notify you of your tax debt and provide opportunity to make payment arrangements before levying benefits.
How much can the IRS take from Social Security?
If an IRS levy on Social Security benefits is enforced, the amount that can be garnished is limited to 15% of the total benefit amount. This is the same rate that applies to wage garnishments.
For example, if your monthly Social Security check is $1,500, under an IRS levy the maximum amount that could be taken is $225 per month. The remaining $1,275 would still be paid to you.
Can you lose all your Social Security to IRS garnishment?
It is not possible for the IRS to garnish 100% of your Social Security benefits. As discussed above, IRS garnishment is limited to 15% of the total benefit amount you are entitled to receive.
The only potential exception is if you owe past due child support payments. In this case, up to 50% of benefits can be garnished until the back child support is paid off. But barring delinquent child support obligations, your benefits cannot be reduced by more than 15%.
How long can an IRS levy stay in place?
An IRS levy on Social Security benefits will remain in effect until:
- The tax debt is paid in full
- The collection statute of limitations for the debt expires
- The levy is released for hardship reasons
In general, the IRS can collect tax debts for 10 years from the date of assessment. An IRS levy can remain in place for the entire 10-year period unless the tax obligation is resolved or the levy proven to be creating undue hardship.
Can the IRS take your Social Security after you die?
The IRS cannot garnish Social Security benefits after the recipient dies. This is because the right to future benefits does not transfer to any heirs or beneficiaries. Any IRS levy that was in place ends upon the death of the beneficiary.
However, if you owe back taxes when you die, the IRS can still collect from any other assets in your estate or property that you leave behind. But Social Security payments themselves cannot be taken by the IRS after death.
Should you report changes if the IRS is garnishing benefits?
If the IRS places a levy on your Social Security benefits to collect unpaid taxes, you are required to promptly report any changes that would affect your benefit amount. This includes events like:
- Filing for additional Social Security benefits
- Entitlement to a benefit increase
- Change of address
- Death of a dependent
Reporting these changes ensures the IRS garnishment is adjusted appropriately and limited to the 15% maximum. Failure to report could allow more than the permissible amount to be levied.
Can you negotiate with the IRS on a levy?
You may be able to negotiate with the IRS to have a Social Security levy withdrawn or modified. This can be done based on hardship or “uncollectible status.”
To prove financial hardship and get a levy lifted, you will need to provide detailed documentation on your income, living expenses, assets and liabilities. The IRS may withdraw a levy if you can show it creates undue economic burden.
You can also request your account be placed in “currently not collectible” status. To qualify, you must prove you have little to no ability to repay the debt currently. If approved, the IRS will suspend collection activity on temporarily.
Can you avoid IRS garnishment of benefits?
The best way to avoid having your Social Security benefits garnished is by staying on top of your tax obligations in the first place. You can reduce the risk of IRS collection action by:
- Paying all taxes you owe in full and on time
- Entering into an IRS payment plan if you cannot pay in full
- Having an IRS installment agreement in place
- Proactively communicating with the IRS about your situation
Taking initiative to address tax debts can often avoid enforced collection actions like a benefits levy.
Are disability benefits subject to IRS garnishment?
Social Security disability benefits (SSDI) can also be garnished by the IRS in certain situations. SSDI payments fall under the Social Security Act’s protections limiting garnishment.
In most cases, the IRS cannot take more than 15% of monthly SSDI benefits to satisfy a tax obligation. However, federal tax liens or delinquent child support allow garnishment similar to regular Social Security.
Can IRS garnish SSI benefits?
Supplemental Security Income (SSI) benefits generally cannot be garnished by the IRS at all. SSI is a need-based program, and the funds are protected from creditor judgments.
The IRS cannot levy SSI payments even if you owe back taxes. The only exception is for delinquent child support obligations, where up to 50% can be garnished.
Conclusion
In summary, the IRS is limited in its ability to garnish Social Security benefits in most cases. However, federal tax liens, delinquent child support, or other exceptions do allow IRS seizure of payments.
If your Social Security benefits are levied, you may be able to negotiate with the IRS for release of the levy. But staying current on all tax obligations is the best way to avoid IRS garnishment of your Social Security income.