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Notice to Employers: Salary Lien Provision for Unpaid Income Taxes

The Maryland legislature, in its 2002 session, passed a bill that changed the amount to be exempted from the salary lien provision of the income tax law in order to conform with amounts for other wage liens listed in the Commercial Law Article, Section 15-601-1. What is currently exempted under the Commercial Law Article for wage liens now applies to the income tax law.

The amount exempt from the wage lien is the greater of:

  •  $145 times the number of weeks wages due were earned, or
  •  75% of disposable wages due;
  •  less medical insurance payments deducted by the employer from the employees wages.

In Caroline, Kent, Queen Anne's and Worcester counties, for each work week, the greater of;

  • 75% of disposable wages due, or
  • 30 times the federal minimum hourly wage at the time the wages are due.
  •  less medical insurance payments deducted by the employer from the employees wages

Disposable wages are calculated by reducing the gross wage by the deduction required by law. Voluntary deductions such as credit union payments, charitable contributions, IRA, etc. are not included in the definition of disposable wages and should not be deducted before the computation is made.

The changes became effective July 1, 2002.

For example, if married with 2 exemptions, the calculation is as follows:

 

Gross Wages

 

$1,150.68

Federal Tax

-$58.75

State Tax

-$55.74

FICA

-$81.89

Disposable Wages

$954.30

Exemption (75%)

-$715.72

Sub-total

$238.58

Less Medical Insurance Payments by Employee

-$80.21

Amount Due to State Under Salary Lien

$158.37

If you have any questions, please contact our Collection Section at 410-260-7966



 
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