As the Baby Boomer generation retires at higher and higher rates every year, the importance of Social Security income (SSI) is rapidly rising. For many retirees, it will be the only income they have except for any savings or investments they may have put in place years before—which means, given that only about half of Americans currently save for retirement at all, for many retirees, SSI will be the only income they have. So the question of whether anyone, including the IRS, can garnish SSI checks or otherwise take SSI income, is a hugely important one.
Can the IRS take my Social Security benefits?
Unfortunately, when the IRS comes into the picture, the answer is yes. The IRS can garnish SSI wages if the seniors receiving them have unpaid tax debts. This is facilitated through a program called the Federal Payment Levy Program (FPLP). By this program, if you have outstanding tax debt, your Social Security benefits will be levied 15% to pay down that debt. This includes any benefits you receive for old age or for survivorship. It should also be noted that while in the past, the IRS would not levy Social Security income below $750 per month, the enacting of the FPLP now ensures that they will levy SSI benefits of all amounts if their recipient is tax delinquent.
That’s the bad news. The good news is that there are several potential mitigating factors. For one, SSI income you receive because of disability insurance is not levied at all. For another, if you fall below a certain income level according to the poverty rules of the Department of Health and Human Services, you may be exempt from these levies no matter how much tax debt you have. Lump sum death benefits and other benefits paid to your children will not be levied, either. And while the IRS does have the ability to levy your SSI checks, only the IRS can do it. No other creditors can legally do this.
How will I know if they are garnishing my SSI income?
If you are tax delinquent and the IRS intends to garnish your Social Security, you will receive two written notices from them letting you know of this intention. (As always, they will be in writing. If you receive a phone call from the IRS, it’s a scammer. Hang up.) These notices will also give you the option to appeal the levy if desired. Either way, you will have 30 days from receiving the second notice to either appeal or pay the tax debt before the IRS will begin the levy.