Compliance requirements for income deduction and withholding vary state by state, especially as it relates to court-ordered child support. Although this process places primary financial responsibility on the employed parent, income withholding also requires accuracy and timeliness on the part of the parent’s employer. From administrative tasks to managing withholding limits, submitting payments, and properly navigating DHS protocols if an employee is terminated, it’s important for Georgia employers to stay up-to-date and compliant with the policies within their state.
In this article, we’ll provide everything you need as a Georgia employer to remain compliant with Georgia income withholding requirements.
Employer Requirements for Income Withholding
In the state of Georgia, income deduction and withholding most commonly applies to child support payments. During this process, an employed parent is required by law to make payments (withheld directly from their paycheck) to support the well-being of their children.
For employers, there are a number of specific terms that must be honored to avoid legal or financial issues. We’ve included key steps and processes below:
In keeping with federal requirements, employers will first receive an Income Withholding Order for Support (IWO). This is only used as a notice in the state of Georgia and is completed by the parent receiving support. Employers will also receive a copy of the completed Income Deduction Order (IDO): a state-specific document that outlines the effective date and duration of the order, as well as required monthly deduction amounts and fees and instructions for payment. Finally, employers will receive a Notice to Payor, which outlines other compliance protocols.
As an employer, you should begin withholding no later than the first pay period after the notice was mailed (within 14 days of the mailing date). Payments must be made within two business days following each subsequent payday/payment date.
Withholding and Deductions
Although specific withholding amounts and terms will be detailed in the IDO and Notice to Payor, employee and nonemployee withholding limits still apply. For employees, Federal CCPA limits are set to 50-65% and 50% for Orders to Withhold and Deliver. For nonemployees, withholding limits are also set to 50% for Orders to Withhold and Deliver.
An employer must continue to make mandatory deductions for federal, state, and local taxes, as well as FICA and Medicare. Georgia state law requires that employers prioritize withholding in the following order: Current support owed, medical insurance payment when requested at a specific dollar amount, and arrears.
Forwarding Payment(s) and Administrative Fees
Following the receipt of all federal and state notices and orders, an employer must deduct the amounts specified in the IDO from their employee’s wages. These funds must be sent to The Georgia Family Support Registry (FSR), which is an office of the Georgia Department of Human Services (DHS) that processes child support payments, including from employers.
An employer is entitled to withhold up to $25.00 from the employee’s paycheck to establish initial income withholding and an additional $3.00 for each child support payment (income deduction) beyond that point. The initial $25.00 fee is designed to reimburse the employer for administrative costs with additional fees covering ongoing deduction administration.
If An Employee Is Terminated
In the event that a parent paying child support separates from their employer, the employer is required to complete the section of the IWO form regarding termination. This completed form must be mailed to the obligee/parent receiving child support.
The IWO section must be completed and the form mailed immediately following termination. After an employee separates from their employer, the employer is technically under no obligation to retain copies of the IWO, IDO, or Notice to Payor, though we recommend retaining these files for a reasonable period (up to 3 years).
Reduce Risk and Guarantee Compliance
Whether your business needs to manage income withholding, garnishment orders or voluntary pay deductions, we offer the guidance and support you need to remain legally compliant. Our experts manage the calculations, setups, and deductions necessary to fulfill all federal and Georgia state requirements and process your deductions in a timely, transparent, and accurate way.
Ready to enjoy stress-free income withholding and payroll? Contact us today to start our collaboration.