Withholding from Bonuses and Lump-Sum Payments

 

Reporting bonuses and lump-sum payments:

Effective July 23, 2023, employers are required to report bonuses and lump sum payments to the Division of Child Support (DCS) per House Bill 1262.  This requirement only applies to employees with a current WA Income Withholding Order that includes a payment amount for past-due child support.

What type of lump sum payments need to be reported?.

  • All lump sum payments that are more than $500 must be reported. Employers may report payments less than $500 or unknown amounts.
  • Employers should report all commissions more than $500 AFTER mandatory deductions and regular child support deductions have been applied.              
  • Lump sum payments include, but are not limited to:
    • Bonuses,
    • Cash service awards,
    • Commissions
    • Performance bonuses,
    • Retroactive pay increase,
    • Severance,
    • Sign on bonuses, and
    • Vacation/holiday pay cash out options. 

When am I required to report these payments?

  • In order for DCS to provide the most accurate past-due child support balance, employers are encouraged to report lump sum payments as close to the payout date as possible. 
  • DCS has up to 14 days to respond to the employer as to whether the lump sum will be garnished and how much to withhold. The 50% limitation still applies.
  • In order to ensure a timely response, DCS prioritizes lump sum reports based on the payout date the employer provides.
  • If the payment is expected to be paid to the employee within the 14-day response time, employers must garnish and hold 50% of the payment until DCS responds or the 14 days expire. Employers can release the remaining 50% to the employee on the 15th day if no response is received from DCS.

How do I report bonuses and lump-sum payments?

       

What information should I report?

  • Employer name
  • Employer contact information
  • Employee name, and SSN or IN account number
  • If known: The amount of the bonus and expected pay out date.

Who should I contact if I have questions?

Employee Resource

This flyer can be given out to assist with explaining the reporting requirement to employees. Available in English and Spanish.