The “Garnishment Formula for Wage Levy” is a calculation worksheet used to figure out how much money (if any) can legally be withheld from an employee’s earnings for a debt under a wage levy, while applying both federal protections and Montana’s exemption rules. It’s designed around the concept of disposable income (the pay left after required tax deductions) and then applies limits so the withholding does not exceed what the law allows for the employee’s pay period. The form references federal wage-garnishment protections in the Consumer Credit Protection Act (Title III, 15 USC §§ 1671–1677) and Montana’s exemption statute (25-13-614, MCA), which together restrict how much of a worker’s earnings can be taken.
The form also defines key terms so the payroll/withholding calculation stays consistent. “Earnings” includes compensation for personal services (such as wages, salary, commissions, bonuses) and also payments to a pension or retirement program. “Disposable Income” is what remains after mandatory deductions required by law (such as federal and state taxes and FICA).
Before You Start
Gather the employee’s gross earnings for the pay period and the mandatory deductions that must be taken out (federal withholding, state withholding, and FICA/Medicare and related federal items listed on the form). If the employee already has other garnishments or levies in place (including child support or IRS levies), get the amounts currently being withheld, because the form requires subtracting those from the new calculation.
Confirm the employee’s pay schedule (weekly, bi-weekly, semi-monthly, monthly, quarterly, or no wages) because the form uses a specific “drop down option” amount based on the pay frequency.
How To File Montana Garnishment Formula for Wage Levy Form
Complete the worksheet for the correct pay period and keep a copy for your records, because the form instructs the employer/payor to retain a copy. The form directs you to mail a copy of the completed worksheet with your remittance (if any money is due) or with any other needed information to the Montana Department of Revenue at PO Box 6309, Helena, MT 59624-6309.
If the calculation results in no garnishment due (because the allowed amount is zero or less), the form instructs you to send no money and return the levy notice to the department with an explanation.
How to Complete Montana Garnishment Formula for Wage Levy Form
Employee Identifiers
- Employee Name: Enter the employee’s full name on the “Employee Name” line exactly as it appears in payroll records.
- Employee ID#: Fill in the internal employee identification number used by your payroll/HR system on the “Employee ID#” line.
- Form Title (“Garnishment Formula for Wage Levy”): Use this to confirm you are completing the correct worksheet for a wage levy garnishment calculation.
- Clear Form: Use the “Clear Form” button only if you need to erase entries and restart, since it resets the fields.
- Dollar Fields Showing “$0.00”: Treat these as fillable blanks where you enter actual amounts for the pay period (they are not pre-set amounts you must use).
Definitions Section (Use These Meanings While Completing The Math)
- Earnings: Use the employee’s compensation for personal services (wages, salary, commissions, bonuses) and include payments to a pension or retirement program when applicable.
- Disposable Income: Calculate this as earnings minus only the deductions “required by law,” such as federal/state taxes and FICA, as described on the form.
- Garnishment: Understand this as a legal procedure requiring withholding of earnings to pay a debt, which is the situation the worksheet is built to address.
Computation Of Garnishment Amount (Lines 1–8)
Line 1 (Total Earnings And Required Deductions)
- “Enter total earnings” (Line 1 – first blank): Write the employee’s total earnings for the pay period before tax withholdings (gross earnings for that period).
- “Deduct federal withholding” (Line 1 – second blank): Enter the federal withholding amount required by law for that pay period, then subtract it from total earnings.
- “Deduct state withholding” (Line 1 – third blank): Enter the state withholding amount required by law for that pay period, then subtract it as instructed.
- “Deduct FICA, Federal Disability and Medicare” (Line 1 – fourth blank): Enter the FICA-related deductions listed on the form and subtract them as part of arriving at disposable income.
Line 2 (Disposable Income)
5) Line 2 “Disposable income” (equals line): Compute and enter disposable income by taking total earnings and subtracting the required deductions shown in Line 1.
Line 3 (25% Of Disposable Income)
6) Line 3 “Enter 25% (0.25) of line 2”: Multiply the disposable income from Line 2 by 0.25 and write that result on Line 3.
Line 4 (Subtract Prior Garnishments/Levies)
7) Line 4 “Deduct any previously received garnishment amount, including child support and IRS levies.”: Enter the total amount already being withheld under earlier garnishments/levies (including child support and IRS levies) and subtract it as the form directs.
Line 5 (Line 3 Minus Line 4)
8) Line 5 “Line 3 minus line 4”: Subtract the Line 4 amount from the Line 3 amount and enter the difference on Line 5.
Line 6 (Disposable Income Re-Entry)
9) Line 6 “Disposable income (from line 2)”: Re-enter the same disposable income figure from Line 2 on Line 6 (this is used for the second limitation test).
Line 7 (Pay-Period Threshold Amount)
10) Line 7 “Deduct amount from drop down option based on pay schedule”: Choose the correct pay-frequency amount listed on the form and enter it on Line 7 as a subtraction from Line 6.
- Use $0.00 if no wages.
- Use $217.50 if paid weekly.
- Use $435.00 if paid bi-weekly.
- Use $471.25 if paid semi-monthly.
- Use $942.50 if paid monthly.
- Use $2,827.50 if paid quarterly.
Line 8 (Line 6 Minus Line 7)
11) Line 8 “Line 6 minus line 7”: Subtract the Line 7 threshold amount from the disposable income on Line 6 and enter the result on Line 8.
Selecting The Final Garnishment Amount
Use the form’s rule that “the amount to be garnished is the lesser of line 5 or line 8 for each pay period,” meaning you compare the two results and select the smaller amount as the withholding for that pay period. If either Line 5 or Line 8 is zero or negative, the form instructs you to withhold nothing, send no payment, and return the levy notice with a short explanation.
Legal Maximum Rule (What The Worksheet Is Enforcing)
The worksheet reflects that the maximum withholding is the lesser of two limits: (1) 25% of disposable income for the pay period, or (2) the amount of disposable earnings exceeding “30 times the federal minimum hourly wage,” which the form notes as currently $7.25 per hour and references 29 USC Sec. 206(a)(1). Use this statement as a final reasonableness check that the chosen withholding amount is consistent with the cap described on the form.