US Taxes: Garnishments

Wisconsin announced that the State Poverty Level was updated, effective 07/01/2025. The Poverty Level table is used in the exemption calculations for Creditor Garnishments and Student Loan garnishments. GPTCI-68607

The Exemption rules are based on the Court Order date. For Creditor Garnishment orders, the requirements were re-reviewed and it was determined that the decision about which “tier” to use should be based Gross Wages rather than Disposable Income. The following exemption rules will be used for Creditor Garnishments subject to Minnesota exemption rules if the Court Order date is from 04/01/2025 - 05/07/2025 or 06/01/2025 or later, effective with this release. GPTCI-67787

If the Court Order Dates above meet the criteria, the exemption rules below are applied:

• If the employee's gross wages (previously disposable income) per week is less than or equal to 40 * SMW (currently $11.13 per week), nothing can be withheld (100% disposable income exemption).
• If the employee’s gross wages (previously disposable income) per week is greater than 40 * SMW but less than or equal to 60 * SMW, there is a 90% disposable income exemption.
• If the employee’s gross wages (previously disposable income) per week is greater than 60 * SMW but less than or equal to 80 * SMW, there is an 85% disposable income exemption.
• If the employee’s gross wages (previously disposable income) per week is greater than 80 * SMW, there is a 75% disposable income exemption.

The Exemption rules are based on the Court Order date. For State Student Loan Garnishment orders, the requirements were re-reviewed and it was determined that the decision about which “tier” to use should be based Gross Wages rather than Disposable Income. The following exemption rules will be used for State Student Loan Garnishments subject to Minnesota exemption rules if the Court Order date is from 04/01/2025 - 05/07/2025 or 06/01/2025 or later, effective with this release. GPTCI-67787

If the Court Order Dates above meet the criteria, the exemption rules below are applied:

• If the employee's gross wages (previously disposable income) per week is less than or equal to 40 * SMW (currently $11.13 per week), nothing can be withheld (100% disposable income exemption).
• If the employee’s gross wages (previously disposable income) per week is greater than 40 * SMW but less than or equal to 60 * SMW, there is a 90% disposable income exemption.
• If the employee’s gross wages (previously disposable income) per week is greater than 60 * SMW but less than or equal to 80 * SMW, there is an 85% disposable income exemption.
• If the employee’s gross wages (previously disposable income) per week is greater than 80 * SMW, there is a 75% disposable income exemption.

Further clarification provided guidance that the Minnesota State Levy garnisment exemptions were not impacted as originally stated by the garnishments changes that impacted the Creditor Garnishments and State Student Loans. The State Levy exemptions have reverted back to the original exemption amounts of 75% of disposable income, 40 times the Federal Minimum Wage per week, or 40 times the Minnesota stated rate of $9.50 per week. GPTCI-67785