The state of Illinois is one of many that allow creditors to garnish a debtor's wages. Many states adopt the federal withholding limit for ordinary wage garnishments, however, Illinois has its own maximum threshold. Furthermore, a debtor's wages can be garnished for child support and tax debts in Illinois.
Ordinary Garnishments
Under Illinois law, an employer can garnish up to the lesser of 15 percent of the debtor's weekly disposable income or the total by which his disposable earnings exceed the greater of 45 times the federal minimum hourly wage or the state minimum hourly wage. This applies to ordinary wage garnishments, such as for debts owed to creditors. At the time of publication, the federal minimum hourly wage is $7.25 and Illinois' minimum wage is $8.25 per hour. Note that under federal law an employer can withhold up to the lesser of 25 percent of disposable wages or the total by which the disposable income is more than 30 times the federal minimum hourly wage.
Disposable income in Illinois is the debtor's wages after federal income tax, state income tax, Social Security and Medicare taxes, and applicable local taxes and child support have been withheld.
Child Support
Illinois adopts federal limits for child support withholding; an employer can withhold up to 50 or 60 percent of weekly disposable wages and an additional five percent for arrears payments. An employer should adhere to one withholding order for the same child. If it receives multiple orders on the same child, it should contact the issuing court to resolve the matter. If it receives multiple orders on the same employee for different children, each family must receive a part of the payment. In this case, the employer uses the child support service's allocation method to figure out the amount each family should receive.
Tax Debts
The Internal Revenue Service and the Illinois Department of Revenue can garnish a debtor's wages for unpaid federal and state tax debts, respectively. The employer uses Publication 1494 to help figure out the amount to withhold for an IRS wage levy. The state can garnish up to 15 percent of the debtor's pay for a state tax debt.
Additional Costs
A judgment in Illinois accrues interest at the rate of nine percent per year until it is paid off. An employer can deduct the greater of $12 or two percent of the garnished amount each time it withholds to compensate for performing the garnishment.
Considerations
An Illinois creditor must sue a debtor, win a judgment and apply for a wage garnishment with the court to garnish wages in the state. It has five years from the default date of the debt to seek a judgment for open accounts and ten years for written contracts. It has 20 years to enforce the judgment by wage garnishment. In Illinois, a child support withholding order takes priority over all wage garnishments except an IRS wage levy that was ordered before the child support order was established.
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