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Can an independent contractor/ 1099 worker's wages be

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Can an independent contractor/ 1099...
Can an independent contractor/ 1099 worker's wages be garnished in Texas for federal student loan debt?
Submitted: 9 months ago.Category: Tax
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10/27/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 9 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,797
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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Hello. Thank you for choosing this Q&A service for assistance. My name is Angela. I will be assisting you.

In brief, the answer is yes, they can. SEE BELOW:

-------------------------------

Wages. Except as otherwise provided by state or federal law, current wages are exempt.39 Current wages for personal services are exempted from garnishment, unless garnished for the enforcement of court-ordered child-support payments.40 Cases regarding this constitutional exemption and statute are liberally construed in favor of the wage earner.41 Unpaid commissions not exceeding twenty-five percent of the applicable aggregate fair market value limitations discussed above fall under the current wages exemption from garnishment. However, amounts due to an independent contractor are outside of the exemption.

REFERENCE SOURCE:

[PDF]garnishment in texas - TheCLM.org

https://www.theclm.org/File/Download?type=10&filename...5347-43da...

Pages 10 and 11

This is a pdf Word document that you will have to download, go to google and google the words above in blue and download the document.

And, yes, the state of Texas can garnish for defaulted student loans. SEE BELOW:

When Can a Creditor Garnish Your Wages in Texas?

Most creditors are not allowed to garnish your wages in Texas. However, there are a few exceptions to this rule. Your wages can be garnished for:

REFERENCE SOURCE:

https://www.nolo.com/legal-encyclopedia/texas-wage-garnishment-law.html

If you do not require further assistance with this matter, I ask that you take the time to scroll to the top of the page and select 3 or more stars to positively rate my response so that I can receive credit for assisting you. A 5 star rating is greatly appreciated. Thank you in advance.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 9 months ago

I think you can use my download link:

file:///C:/Users/angel/Downloads/115.pdf.%20(1).pdf

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Customer reply replied 9 months ago
I read through the first document you pulled the exemption part from and it doesn't seem to reflect my situation. This is not a post- judgement garnishment. There is no court order - it is a direct actio as allowed in Texas.
I keep seeing things like https://www.garnishmentlaws.org/wage-garnishment-for-the-self-employed/
And https://www.texastribune.org/2015/04/02/business-owners-lawmakers-set-sights-child-support/
Both of which seem to say contractors can't be garnished.
Tax Professional: Tax.appeal.168, Tax Accountant replied 9 months ago

Hello again. I saw all of those links that you are referring to as well. I will check into this matter a bit further and get back to you and let you know what I come up with. It will be at least 1/2 hour to an hour before I can get back to you.

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Customer reply replied 9 months ago
Ok- thanks so much. I am at my wits end trying to imagine how my employer (and so is she) would even come up with an amount as my work is sporadic and the amount I make fluctuates with no set schedule or pay...
Tax Professional: Tax.appeal.168, Tax Accountant replied 9 months ago

Ok. I will see what I can find out. I am stepping away from the computer shortly for a while, this is why I will have to get back to you.

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Customer reply replied 9 months ago
Will check later - thank you
Tax Professional: Tax.appeal.168, Tax Accountant replied 9 months ago

Ok. Digging deeper, I found a Senate Bill that classifies an Independent Contractor as an "Employee", therefore I am going to stick with my original answer that yes, Texas can garnish the wages of an Independent Contractor. As the income varies, how the calculations are done, I couldn't tell you. My thought is that each week, or each pay period, the amount earned by you is multiplied by the required percentage amount to be withheld. SEE BELOW:

--------------------------------------

Excerpt From an article in the Texas Tribune (2015)

Rolfe said that pending legislation would help expedite the collection process when a person is properly classified and changes employers. Senate Bill 1727 by state Sen. Brandon Creighton, R-Conroe, would include “independent contractor” under the official IRS definition of “employee.”

REFERENCE SOURCE:

https://www.texastribune.org/2015/04/02/business-owners-lawmakers-set-sights-child-support/

-------------------------------------------

Senate Bill 1727:

(1)An "Employee" means an individual who is an employee within the meaning of Chapter 24 of the Internal Revenue Code of 1986 (26 U.S.C. Section 3401(c)) or an independent contractor as defined by the Internal Revenue Service.

REFERENCE SOURCE:

http://www.legis.state.tx.us/tlodocs/84R/billtext/pdf/SB01727I.pdf#navpanes=0

Page 3

------------------------------------------

IRC Section 26 U.S.C. Section 3401(c)

(a)Wages

For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that such term shall not include remuneration paid—

(1) for active service performed in a month for which such employee is entitled to the benefits of section 112 (relating to certain combat zone compensation of members of the Armed Forces of the United States) to the extent remuneration for such service is excludable from gross income under such section; or

(2) for agricultural labor (as defined in section 3121(g)) unless the remuneration paid for such labor is wages (as defined in section 3121(a)); or

(3) for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority; or

(4)for service not in the course of the employer’s trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for such service is $50 or more and such service is performed by an individual who is regularly employed by such employer to perform such service. For purposes of this paragraph, an individual shall be deemed to be regularly employed by an employer during a calendar quarter only if—

(A) on each of some 24 days during such quarter such individual performs for such employer for some portion of the day service not in the course of the employer’s trade or business; or

(B) such individual was regularly employed (as determined under subparagraph (A)) by such employer in the performance of such service during the preceding calendar quarter; or

(5) for services by a citizen or resident of the United States for a foreign government or an international organization; or

(6) for such services, performed by a nonresident alien individual, as may be designated by regulations prescribed by the Secretary; or

[(7) Repealed. Pub. L. 89–809, title I, § 103(k), Nov. 13, 1966, 80 Stat. 1554]

(8)(A)for services for an employer (other than the United States or any agency thereof)—

(i) performed by a citizen of the United States if, at the time of the payment of such remuneration, it is reasonable to believe that such remuneration will be excluded from gross income under section 911; or....You can refer to the reference source for the rest of the text.

REFERENCE SOURCE:

https://www.law.cornell.edu/uscode/text/26/3401

If you do not require further assistance with this matter, a positive rating of 3 or more stars is greatly appreciated. Thank you in advance.

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