I have an employee for whom we received a writ of garnishment for continuing lien on earnings ...


Q. (cont.) that was filed and served by his ex-wife. There are no attorneys or collection companies involved. The payment will go directly to her. I believe that we need a W-9 from her, since the amount of the payment will be over $600. Is this correct?

A. I spoke with IRS information specialist Ms. Lewis (ID #1003078897), who referred me to regulation 26 CFR 1.6041-1, "Return of information as to payments of $600 or more." (https://www.law.cornell.edu/cfr/text/26/1.6041-1)

The regulation clearly states that payments to be reported include compensation for services rendered, interest, rents, royalties, etc., all of which are income. Since you are not yourself compensating the employee's ex-wife, but rather remitting a portion of his compensation directly to her, and there are no attorneys involved, you do not need to report nor collect a W-9 form from her. The total wages, including the garnishment amount, will be reported to the employee on his W-2, of course.

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