Withholding Limitations Worksheet
Use the Withholding Limitations Worksheet for Support and Medical Support (PDF) and the New York State Income Withholding for Support (PDF) to calculate the withholding amount. Note: You may also need the amount of the health insurance premium, if you received a National Medical Support Notice (PDF) for the dependents listed on Page 1 of the income withholding order. The online income withholding calculator, based on the Withholding Limitations Worksheet, is an additional tool to calculate income withholding.
New York State regulations require that support obligations be fulfilled in this order:
- Current support obligation amounts
- Full amount of health insurance premium
- Arrears—past-due support obligations and other amount, if any
Calculation of withholding requires you to determine the following values for the employee or independent contractor:
- Disposable income
- Maximum Withholding allowed under the Consumer Credit Protection Act (CCPA)
- Income withholding amounts
- Health insurance premium
- Proration of Maximum Withholding
- Amounts to withhold and remit
Disposable income equals the earnings left after certain required deductions from gross pay. New York State law requires the following six deductions:
- Federal income tax
- Social Security tax (FICA)
- Medicare tax
- State income tax
- City/local income tax
- Involuntary retirement or pension plan payments
Subtract the total of these deductions from the employee or independent contractor's gross pay. Note: This amount is the employee's "disposable income" for the purposes of child support withholding. This amount may not be the same as the employee's net pay.
Disposable income = Gross pay – Required deductions
Maximum Withholding: CCPA limitations on withholding
The Consumer Credit Protection Act (CCPA) limits withholding for child support. The maximum that can be withheld for support may range from 50–65% of an employee or independent contractor's disposable income. The CCPA limitation percentage depends on the answers to two questions:
- Does the employee or independent contractor support another spouse or child besides those listed in this IWO?
If you have received more than one IWO for this employee, answer "Yes." If you don't know whether the employee supports another spouse or child, check the employee's W-4 form or ask the employee.
Does the employee or independent contractor owe arrears greater than 12 weeks on any IWO?
Check the first page of the IWO. If the employee owes arrears greater than 12 weeks, the "Yes" box in the Order Information section will be checked.
Note: If this box is checked on any IWO for the employee, you must answer "Yes" to this question.
The following table shows the Maximum Withholding limitation percentage for each combination of other dependents and arrears.
|CCPA Maximum Withholding Limitation Percentage|
|Other dependents||No arrears OR
Arrears less than 12 weeks
|Arrears greater than 12 weeks|
|Employee supports another spouse or child||50%||55%|
|Employee does NOT support another spouse or child||60%||65%|
For example, if the employee supports others and owes arrears greater than 12 weeks, the correct CCPA limitation percentage is 55% or 0.55.
To calculate the Maximum Withholding amount for this employee, multiply the disposable income by 0.55.
Maximum Withholding = Disposable income ×percentage
TIP: Maximum Withholding or less? You will normally withhold either the full amount of all obligations, including the health insurance premium, or the Maximum Withholding for the employee, whichever is less. You cannot withhold more than the Maximum Withholding.
Compare the total for all IWOs to the Maximum Withholding
Should you withhold the Maximum Withholding or a lesser amount? To be sure, find the Total Amount to Withhold for each IWO you received for this employee or independent contractor. The IWO total is shown directly below the ORDER INFORMATION on the first page of the IWO. For the example in the illustration, the total is $341.54 biweekly.
Be sure to choose the amount that matches your pay cycle. Under AMOUNTS TO WITHHOLD, the total is shown for various pay cycles. If your pay cycle is weekly, for instance, for this IWO you would withhold $170.77.
Add the Total Amount to Withhold from each IWO you received for the employee, along with the employee's share of the court-ordered health insurance premium (if any), for your pay cycle. Compare this total to the Maximum Withholding. If the total is less than or equal to the Maximum Withholding, your calculation is complete at this point. Withhold this total (all IWOs and health insurance premium). If the total is more than the Maximum Withholding, continue with the Proration of Income Withholding Amount(s).
Proration of income withholding amounts
Order Information: Obligation types and amounts
In the ORDER INFORMATION section on the first page of the IWO, you will see various types of obligations listed—"current child support," "past-due child support," "other (payments to a third or fourth party)"—along with the frequency (e.g., biweekly, weekly, monthly). In the prorated calculation, these amounts must be treated separately because of the CCPA limits on withholding. Depending on the Maximum Withholding for the employee or independent contractor, past-due and other amounts may receive only partial payment or no payment; the health insurance premium may or may not be paid.
Convert ordered amounts to your pay cycle (if needed)
First, note the ordered payment frequency for the IWO as a whole. In the example, the IWO total is to be paid biweekly. If your pay period is also biweekly, no conversion is required for any amounts listed as biweekly. However, this IWO lists several amounts to be paid at different frequencies, such as "current cash medical support" at $40 weekly, "past-due cash medical support" at $10 monthly, and "other (payments to a third or fourth party)" at $15 monthly. You must convert each of these amounts to the biweekly amount to match your pay cycle.
Yearly payment frequency values for the most common pay cycles are listed below:
- Weekly: 52 payments per year
- Biweekly: 26 payments per year
- Semi-monthly: 24 payments per year
- Monthly: 12 payments per year
The general formula to convert to another pay cycle follows:
IWO amount × IWO frequency value ÷ Your pay cycle value = Amount to use in calculation
Again, for the sample case, the IWO orders payments at various frequencies, but your pay cycle is biweekly. Here are the biweekly amounts to use to calculate withholding:
|Current child support||$100.00||Biweekly||none||$100.00|
|Past-due child support||$110.00||Biweekly||none||$110.00|
|Current cash medical support||$40.00||Weekly||40 × 52 ÷ 26||$80.00|
|Past-due cash medical support||$10.00||Monthly||10 × 12 ÷ 26||$4.62|
|Current spousal support||$40.00||Biweekly||none||$40.00|
|Past-due spousal support||$0.00||Biweekly||none||0.00|
|Other (payments to third or fourth party)||$15.00||Monthly||15 × 12 ÷ 26||$6.92|
You may have an employee or independent contractor with an IWO where the only obligation type is for arrears—past-due or other amounts. Be sure to enter the amount under "past-due" or "other," as identified in the IWO. New York State law requires that current support obligations and dependent health insurance be paid before any past-due or other amounts. If the employee's earnings are not enough to fulfill all obligations, an IWO with an arrears-only obligation may not receive any payment.
Include amounts from all orders
If you have received more than one IWO for the employee or independent contractor, withhold the total amount for all orders combined. Remember to convert the amounts, if necessary, to withhold the amounts for your pay cycle.
Amount to withhold for support = Combined total for all IWOs for your pay cycle
Health insurance premium
To determine whether to withhold for dependent health insurance, consider the following:
Are you required to withhold for dependent health insurance? Have you received a National Medical Support Notice (PDF) for this employee or independent contractor?
If not, you do not need to withhold any additional premium from the employee's earnings. Continue with the withholding for child support obligations and enter "0.00" for the health insurance premium.
If you are required to withhold for dependent health insurance, then find these amounts:
- Total of all obligation amounts plus the health insurance premium, or "total ordered" (Line 10 of the worksheet)
- Total of all current obligation amounts plus the health insurance premium, or "current + premium" (Line 13d of the worksheet)
- Is the "total ordered" less than the Maximum Withholding?
If yes, withhold the health insurance premium and the full amount of all obligations.
- Is the "current + premium" less than the Maximum Withholding?
If yes, withhold the premium, the current obligation amounts, and any remaining amount up to the Maximum Withholding (see an example).
Unless you can answer "yes" to one of these questions, you cannot withhold the health insurance premium.
The full amount of the health insurance premium must be withheld. The premium cannot be prorated or paid in part.
For an employee with a biweekly total current obligation amount of $360.00 and biweekly arrears obligations of $180.00, a Maximum Withholding of $463.65 and a biweekly health insurance premium of $45.00, the result would be as follows:
- Yes, withholding for health insurance is required for this employee.
- "Current + premium" = $405.00, less than the Maximum Withholding. Withhold the full current obligation amounts ($360.00) plus the health insurance premium ($45.00) plus prorated arrears ($58.65), up to the Maximum Withholding.
When to prorate the Maximum Withholding
If the employee or independent contractor's obligations exceed the Maximum Withholding and and the employee has more than one Income Withholding Order (IWO), the obligations that make up the Maximum Withholding amount must be prorated among the IWOs so that each IWO receives its share of the payment. When you submit your payment, be sure to identify the prorated amount for each IWO. Detailed sample cases show how to prorate the Maximum Withholding in the following situations:
- Case A: Current obligation and the health insurance premium are paid in full; arrears are prorated.
- Case B: Current obligation is paid in full, but the health insurance premium cannot be paid; arrears amounts are prorated.
Note: The health insurance premium must be paid in full or not at all. The premium cannot be prorated.
- Case C: Current obligation amounts are prorated; the health insurance premium and arrears cannot be paid.
The following table shows the required sequence of steps to decide when to withhold for dependent health insurance and what to prorate. Begin at Item 1 and compare the total of all obligations (current support, arrears, and heatlh insurance) with the Maximum Withholding.
|Proration and health insurance withholding|
|If the sum of these obligation types is…||Greater than the Maximum Withholding||Less than than the Maximum Withholding||Withhold health insurance?|
|1. Total current obligations + health insurance premium + total arrears||Continue to 2 ↓||Withhold current, premium and arrears||Yes|
|2. Total current obligations + health insurance premium||Continue to 3 ↓||Withhold current and premium.
If remainder, prorate arrears (Case A)
|3. Total current obligations + arrears||Continue to 4 ↓||Withhold all current and arrears||No|
|4. Total current obligations||Prorate current (Case C)||Withhold all current and prorate arrears (Case B)||No|
Do NOT skip any of the steps! Always begin at 1 and follow the sequence until you reach the correct action for this employee.
Amounts to withhold and remit
If possible, the final amount to withhold for the employee or independent contractor will include the Total Amount to Withhold for all IWOs and the full amount of the health insurance premium. However, the amount you remit to the Processing Center must include only the withholding for support—not the health insurance premium.
For the example described above (total current obligations $360.00, health insurance premium $45.00, plus arrears of $160.00), you would withhold the full $463.65 but remit $418.65 to the Processing Center.
Total amount to withhold may include health insurance premium.
Total amount to remit includes only support and medical support obligations.