Federal and state law require that if a parent owes child support, part of that parent's wages, periodic income, or other income must be withheld to pay support. These laws help guarantee timely and regular child support payments. Income withholding is the most reliable method of making sure support is paid.

As a Tennessee employer, you may receive a child support order or notice from:

• A local Tennessee child support enforcement agency;
• A child support enforcement agency in another state; 
• Tennessee District Court, through a private attorney; or
• Court Clerk.

Tennessee employers must honor all of these requests. If you get a withholding order from another source, you may wish to consult an attorney. The notice or order tells you how much to withhold from your employee for current support, delinquent support (arrears), or both. It also tells you where and how to send payments and explains your rights and responsibilities.

You must withhold income from wages, salaries, commissions, vacation pay, bonuses, worker's compensation, disability payments, payments from a pension or retirement program, and interest; a sole payment or lump sum; and irregular income.

How Much to Withhold

You must withhold the entire amount of the child support up to 50 percent of the employee's net disposable income. Calculate this amount by subtracting FICA, withholding taxes and children's health insurance premiums from the employee's gross income. The following example is for an employee who is paid $30,000 a year ($1,153 bi-monthly)

You pay the employee $1,153 every two weeks, and deduct approximately $167 in federal income taxes, $86 in FICA and $38 for dependent health insurance.

Total deductions equal $291.

Subtract $291 from $1,153 to determine the employee's net disposable income of $862.

50 percent of $862 is $431, which is the total amount that you can withhold (even if the income withholding order is higher).

Priority of Withholding Payments

In Tennessee, you must honor income withholding orders in the following order of priority:

1. All orders for current child support, including 5-percent fee;
2. All orders for past due child support (arrearages);
3. All orders for current support due to a spouse;
4. All orders for arrearages due to a spouse;
5. All orders for statutory fees and court costs.

Where to Send Payments

Federal and state laws require each state to establish a centralized location, or state disbursement unit, to receive and disburse support payments withheld under an income withholding notice. In Tennessee, send payments to:

Central Child Support Receipting Unit
P. O. Box 305200
Nashville, TN 37229

Label the payments with the employee's name, case number, and date withheld. The date of withholding is the date the employee no longer has control over wages withheld for child support.

When to Send Payments

Send the payments no later than seven business days from the date your employee is paid. A business day is a day on which state offices are open for regular business.

Charging for Income Withholding

You may deduct a fee of up to 5 percent but no more than $5.00 for each payment to offset the cost of processing an employee's child support payments each month.

Multiple Income Withholding Orders

Some employees may receive different income withholding orders for different children.

By law, employers must withhold payments for current support obligations before withholding payments for delinquent obligations. However, the total amount of payments for current support and delinquent support from all orders combined cannot exceed 50 percent of the employee's net disposable income. Net disposable income is determined by subtracting FICA, withholding taxes and children's health insurance from gross income.

If the child support amount in the notice is greater than 50 percent of the employee's net disposable income, prorate the child support between the different orders, following these steps:

1. Determine the net disposable income and the total of all current child support ordered to be withheld for the employee.
2. Calculate the percentage that each current child support order contributes to the total current child support owed.
3. Allocate the available income (50 percent of net disposable income) according to the percentage that each order contributes to the total current child support ordered.
4. In some cases, the total current child support obligations can be withheld without exceeding the 50-percent limit, but withholding additional funds to pay for arrearages would exceed the 50-percent maximum. In these instances, use the same prorated process to allocate withholding for arrears.

Example of Prorating Multiple Income Assignments

An employee has:

• Net disposable income of $900 per month
• One child support order (A) for $250
• Once child support order (B) for $200
• One child support order (C) for $150
• A total child support monthly obligation of $600

1. After subtracting taxes, FICA and children's health insurance premiums, the employee's income is $900. Therefore, the net disposable income eligible to be withheld is 50 percent of $900 or $450. The employee's total obligation is $600 a month, but only $450 can be withheld.
   
   
2. Determine the percentage that each child support order contributes to the total obligation ($600).

Order A=$250/$600 or 42%
Order B=$200/$600 or 33%
Order C=$150/600 or 25%

3. Allocate the available income. Multiply the percent calculated above by the amount that can be withheld ($450). The result is the amount to withhold for each case when you send the $450 to the Central Child Support Receipting Unit.
   
   Order A=$250/$600 or 42% x $450 = $189.00
   Order B=$200/$600 or 33% x $450 = $148.50
   Order C=$150/$600 or 25% x $450 = $112.50
                                           Total      $450
   

Income Withholding from Other States

Under the Uniform Interstate Family Support Act (UIFSA), employers are required to honor income withholding orders from other states. Send payments requested by other states to the registry indicated on the notice sent by that state.

UIFSA contains the following provisions for income withholding:

• An agency in another state may send an income withholding order or notice directly to an employer in Tennessee. You must honor the order or notice. All withholding orders or notices are required to be in a standard format. While forms may have a different overall appearance from state to state, they should contain all the information you need to withhold and mail payments. The following information should appear in the same order on all forms you receive:

1. Employee/Obligor's last name, first name, and middle initial (if known)
2. Employee/Obligor's social security number
3. Case identifier (or other identifier) used for recording the payment
4. Address to which payments are sent
5. Custodial parent's last name, first name, and middle initial (if known)
6. Child(ren)'s name(s) and date of birth listed in the support order
7. Name of state that issued the underlying child support order
8. Dollar amount to be withheld for payment of current child support
9. Time period that corresponds to the amount in #8 (e.g., current support due per month)
10. Dollar amount to be withheld for payment of past-due child support
11. Time period that corresponds to the amount in #10 (e.g., past-due support due per month)
12. If any other amounts are to be withheld, the notice/order should indicate the corresponding time period (e.g., month)

• You are required to provide a copy of the other state's withholding order or notice to the employee immediately upon receipt.
• If you fail to honor the other state's order or notice, the same penalties apply as if the order or notice had been issued by a court or agency in Tennessee.
• The employee may contest the other state's order or notice. If the employee decides to contest the other state's order or notice, the employee must send a letter to the agency that issued the order or notice. Continue to withhold support payments until notified to change or stop withholding by the agency that issued the order or notice. If you do business and have a registered agent in another state, and you or your registered agent receives an income withholding order or notice from the other state, follow the laws of the state where the employee works, as described in Examples 1 and 2.

Link to Frequently Asked Questions about Income Withholding