Child support is a periodic payment mandated by a state authority for a parent to financially support a child. Employers may receive a detailed garnishment order to deduct an amount of the parent’s wages.
This article will cover how to create and maintain Child Support deductions.
Setting Up a Child Support Deduction for an Employee
In Payroll, navigate to the People section tab and select the employee for whom you need to set up the deduction. Select the Benefits Deductions tab.
Click Add Child Support.
Please be aware that all garnishments other than child support should be entered as Deductions.
Input the requested fields to ensure a complete deduction setup.
- Description - Enter a description to specify the type of garnishment (e.g., Child Support). Each unique description will create a new column for reporting and check stub line.
- Amount - Enter the per pay period amount to deduct. A garnishment order will include how much an employee’s wages should be garnished per pay period, broken out by how much is due depending on the pay cycle. Be sure to enter the amount listed next to that employee's pay frequency.
- Max Percent - Enter the maximum amount to garnish listed on the support order. The Federal Consumer Credit Protection Act (CCPA) and certain state agencies impose limits on the amount of disposable income that can be garnished. Use this value as the max-percent field. If the per pay period amount exceeds the maximum percent of employee disposable income, we will deduct up to the maximum percent.
- Managed (Payment remitted automatically) Check Box - Checking the box for ‘Managed (Payment remitted automatically)’ indicates that Check will handle pulling the support amount from the employers and making the payments. In rare cases where the employer chooses to manage payments internally, leave the box unchecked.
- Agency - Select the state that the notice is from (do not select the residential state of the employee) - this tells Check where to send payments.
- External ID - On the child support order, this will be the "remittance identifier" - this tells the agency which child support case to apply the money to.
- Issue Date - Enter the date the collections agency issued the child support order. This information is usually on the notice, but if not, you can enter the next check date.
- Effective Start - Enter the date the child support should take effect.
- Effective End - Enter the date the deduction should stop calculating; leave blank unless you have received form 668D indicating that the order can be terminated.
Child Support Garnishment Example
In this example, $25.00, or 25% of the employee’s disposable income (as listed on the garnishment order), will be deducted from the employee’s wages on all payrolls after the effective start date of January 1, 2024.
Child support garnishments are typically applied to the employee’s wages until the employer receives a termination letter, therefore, child support post-tax deductions should initially be configured without an effective end date.
Updating Child Support Garnishments
Due to an employee’s changes in circumstances, their obligation to pay child support may change. An employee may have to pay a different amount or may be subject to a different maximum amount to garnish. In these situations, an employer will receive an updated notice from the state authority and should update the post-tax deduction to reflect the new information.
All fields of a child support post-tax deduction can be updated. Changes will impact how the deduction applies to future payrolls. Changes will not affect how the deduction has applied to past paid or currently approved payrolls.
To modify an existing Child Support deduction, go to the People section, select the employee you wish to edit, then click on the Benefits & Deductions tab. Finally, click Edit pencil next to the child support deduction and update the fields as necessary. Click the green checkmark ✓ to Save.
Multiple Effective Child Support Garnishments
An employee may have multiple active child support orders at once, each should be configured as an individual post-tax deduction. If deducting for all orders in full would exceed the allowable amount to garnish, Check will partially apply all deductions according to the Administration for Children and Families rules.
If an employee has a child support garnishment that contains an arrears component or a medical requirement, please submit a ticket to the Arcoro support team and include a copy of the order.
Multiple Effective Post-tax Deductions of Different Types
If an employee has both deductions and child support post-tax deduction types, Check will apply all child support deductions before applying any deductions. If there is sufficient net pay remaining, Check will apply the deductions. If not, Check will skip applying the deductions and will include a payroll item warning for each skipped deduction.
If an employee requires that any of the following post-tax deduction configurations be applied in a particular order, please submit a support ticket to the Arcoro team, including the request with the priority order of the garnishments:
- Multiple garnishment post-tax deductions
- One or more child support garnishments and one or more garnishments
Remittance of Child Support Payments
The 'Managed' checkbox on the post-tax deduction resource indicates whether a child support garnishment should be remitted by Check, and it applies only to child support deductions.
- If the box is checked, Check will include the garnishment amount in the payroll's cash requirement and remit the payment to the appropriate agency on the employer's behalf.
- If unchecked, Check will not include the garnishment amount in the payroll's cash requirement, and the employer will be responsible for sending the payment.