Employers’ Guide to Child Support, Part 1

The Wisconsin Child Support Program

Wisconsin’s Child Support Program helps children receive the financial support they need and deserve from both their parents. The program succeeds because of cooperation between federal, state, and local public agencies working in partnership with the private sector. Wisconsin’s employers are important partners in the child support program and play an essential role in our continuing efforts to improve conditions for the children in our state.

The child support program (also known as the IV-D program) was created in 1975 by title IV-D of the federal Social Security Act to ensure that support orders are established and enforced for children living apart from one or both parents.

The Wisconsin Department of Children and Families (DCF) manages the child support program statewide. The 71 county and three tribal child support agencies provide direct services to you and other child support program customers. Click here for the directory of county and tribal child support agencies.

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Income Withholding

1. Overview

An important component of the Wisconsin Child Support Program is the state statutory requirement that all orders for child support, maintenance, and family support include a provision for immediate income withholding by the payer’s employer. (The court may make an exception if income withholding would cause the payer irreparable harm.) Income withholding is required whether or not the individual is delinquent in making payments. A court order for child support constitutes an assignment to the agency designated to receive payments of all income, including commissions, earnings, salaries, wages, pension benefits, and other money due or to be due in the future. Courts or their designated agents must notify employers of the amount of support to be withheld from income.

Current obligations, past-due support (arrearages), and annual receipt and disbursement fees are subject to income withholding per chapter 767.265, Wis. Stats. Click here for other statutory references.

Income withholding for child support has priority over any other legal process (e.g., a garnishment) against the same income. However, federal tax levies in effect before receipt of an income withholding notice have priority unless the Internal Revenue Service (IRS) agrees to an alternative priority.

Income withholding orders/notices remain in effect until further notice. You will receive a notice if the terms of an order change, or when the order is no longer in force. You must keep the income withholding order/notice on file and withhold the stated amount whenever the employee receives a paycheck. This applies to all employers, including temporary employment agencies, seasonal employers, and employers that periodically lay off and then rehire employees.

2. Employers’ Costs and Charges for Income Withholding

You may deduct a fee from an employee’s wages to offset child support withholding costs. You may deduct this fee from the employee’s wages, commission check, or other sources of income, but not from the child support payment. The fee does not affect the employee’s gross income for calculating child support amounts.

By law, the fee must reflect the actual cost, but may not exceed $3.00 per withholding. You may charge a separate fee for each incidence of withholding. For example, you may charge separate fees for withholding child support from wages and for withholding child support from a commission payment. You may also charge two separate fees if you withhold child support from an employee for two different families' child support orders from two different states. You may not charge a fee for sending an insurance premium payment to the appropriate provider, but fees are permitted for insurance premium payments sent to the Wisconsin Support Collections Trust Fund.

3. Notifying Employers

You may receive notification to withhold income from:

• The Wisconsin court or child support agency that issued the income withholding order. The county/tribal child support agency, circuit court or family court commissioner will send the notification by mail or Fax. The notice will tell you when to begin withholding, the amount and frequency of the withholding, where to send payments, and what to do when the payer leaves your employment.

- or -

• A court or agency in another state. Other states’ courts or child support agencies may issue income withholding notices directly to you or to your registered agents in their state. When you receive a notice from another state that there is an income withholding order in effect for an employee, you should provide a copy to the affected employee, and withhold and forward the funds according to the terms of the order/notice. Click here for more information on orders/notices from other states.

Please Note: the employee has the right to contest the withholding by notifying the child support agency, but you must obey the court notice/order while the appeal is pending, unless directed differently by the court.

4. Income Definitions

Gross income includes all income sources considered gross income under IRS rules, including wages, salaries, tips, commissions and bonuses before taxes are levied and other deductions are made. When calculating the child support obligation, gross income includes worker’s compensation or other personal injury awards intended to replace income; unemployment compensation; income continuation benefits; Social Security Disability Income (SSDI) payments; voluntary deferred compensation; military allowances and veteran benefits; lottery winnings; and undistributed income of a corporation in which the payer has an ownership interest sufficient to individually exercise control or to access earnings of the business. It also includes employee contributions to any employee benefit program or profit-sharing and voluntary contributions to any pension or retirement account whether or not the account provides for tax deferral or avoidance.

5. Withholding Amounts

Child support obligations may be expressed as a:

• Fixed-dollar amount (e.g., $50 a week)
• Percentage (e.g., 17% of gross income)
• Combination of a percentage with an additional fixed-dollar amount (see example A-1)
• Combination of a percentage with a fixed-dollar amount minimum (see example A-2)
• Combination of a percentage with a fixed-dollar amount maximum (see example A-3)

6. Withholding Limits

Withholding limitations for employees are stated on their notices to withhold.

You are legally obligated to withhold the amount ordered by the court. The income withholding order/notice you receive may instruct you to limit the amount of withholding to the limits in the federal Consumer Credit Protection Act (CCPA). If you cannot withhold the ordered amount in full because the withholding would exceed the CCPA limit, withhold the amount up to the CCPA limit, notify the agency listed on the withholding order/notice, and, as always, include the amount of the employee’s gross income. The employee will still be responsible for any difference between the CCPA limitations and the court orders and may voluntarily agree to have the full amount withheld.

If your employee has one or more Wisconsin child support income withholding notice/order, only withhold up to the applicable CCPA limit. If your employee has income withholding notices/orders from more than one state, click here to see multi-state examples C-1 and C-2.

7. Special Form and Procedures for Withholding R&D Fees

Periodically, the Wisconsin Department of Children and Families (DCF) sends a special notice to employers for their employees who have failed to pay their annual receipt and disbursement (R&D) fees. This notice includes an R&D Withholding (only) form. The form is pre-printed with the employee’s name, KIDS PIN number, Social Security number and the amount of R&D fee the employer should withhold. The R&D Withholding form is different than the usual Employer Withholding Coupon/List.

The R&D withholding form and the employer withholding coupon/list are not interchangeable.

For the R&D withholding form –

• Check the "no longer employed" field by the employee’s name if appropriate
• Fill in the amount of R&D fees you are withholding for each employee
• Send in this form with one check for the total amount of fees withheld
• Do not include other income withholding payments or coupons/lists with this check or mailing
• Do not use electronic funds transfer (EFT), electronic data interchange or diskette
• Do not list an employee again even if they have more than one support order
• Do not add employees who are not listed
• Make check out to WI SCTF
• Mail to:
  Wisconsin Support Collections Trust Fund (WI SCTF)
  Box 74400
  Milwaukee, WI 53274-0400

If you have questions about withholding R&D fees, please call the R&D information line at 414-615-2585.

The federal consumer credit protection act (CCPA) limits do impact the R&D withholdings. Withhold for the R&D fees after all other support withholdings.

Click the links below for:

• Calculator to compute the R&D fee within CCPA limits (Requires MS Excel)
• R&D fee calculations within CCPA limits (B-1 and B-2).
• for information about the CCPA limits.

8. Questions and Answers about R&D Fee Withholding

How often will I get a R&D fee withholding form?
If you have an employee who owes R&D fees, you will receive an income withholding notice for R&D fees up to three times a year (spring, summer and fall).

Why do some employees have an R&D fee debt and others don’t?
Some support payers have been paying this fee when due. Some court-ordered debts such as court costs are not charged an R&D fee.

Can I recoup my cost of this withholding?
Yes. Since you are required to write a separate check for the fees, costs up to $3 are allowed per withholding.

When do we have to withhold the R&D fee? Is there a deadline?
You are required by law to withhold unpaid fees in the next payroll or as soon thereafter as practicable. There must be strong justification for any delay beyond the next payroll.

If I cannot withhold the full amount of the R&D fee from this payroll, should I send in the rest with the next payroll?
No. Submit only the amount of the R&D fee that is allowed under the CCPA limits as shown in R&D Fee examples B1 and B2. Click here to see the examples.

Additional questions - if you have additional questions about withholding R&D fees, please call the R&D information line at 414-615-2585.

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Support Payment Processing

In Wisconsin, the Wisconsin Support Collections Trust Fund (WI SCTF) processes all support and support-related payments.

1. Ways to Pay

• Electronic Funds Transfer (EFT)

The Wisconsin Support Collections Trust Fund (WI SCTF) can accept employer remittance for support collections either as a Cash Concentration and Disbursement (CCD) or Corporate Trade Exchange (CTX) formatted file. Call WI SCTF at 414-615-2422 for information on file formatting requirements.

• Free ET Software

The WI SCTF furnishes free personal computer software to any employer that wishes to remit electronically. Windows 3.1 and a modem are the minimum requirements for using the software. The software is programmed to communicate with Wisconsin's larger financial institutions and is supported by the WI SCTF. Call WI SCTF at 414-615-2422 for information.

• Free Diskette Software

The WI SCTF also provides an easy-to-use, diskette-based software product for remitting payments. Pre-loaded with the employer’s withholding list, the employer needs to only make changes and return the diskette, along with the payment, to the

WI SCTF for processing. A new diskette is returned to the employer before the next withholding is due. Call WI SCTF at 414-615-2422 for information

• Other Electronic Ways to Pay

The WI SCTF can accept a number of Electronic Data Information (EDI) formats including:

• 9-track cartridge tape
• 9-track reel tape
• Diskettes
• File transfer protocol (ftp)

For information about electronic funds transfer, please call the WI SCTF at
414-615-2422.

• Paying online

The online payment option for employers is Expert Pay.  Expert Pay uses money transfers from your savings or checking account

Important - Before signing up for this service, please read the details below.

• Fees - $0.85 per transaction
• Timing - Your payments is not recorded until it is actually received by the Wisconsin Support Collections Trust Fund - up to 7 days after you make the payment in Expert Pay.

Disclaimer: This electronic payment product is offered by a private company. The Wisconsin Child Support Program does not receive the fees for this service.

For more detailed information about this services or to sign up www.expertpay.com

2. Mailing Your Payments

For Wisconsin withholding notices, mail your check (made out to WI SCTF) along with your list/coupon to:

Wisconsin Support Collections Trust Fund (WI SCTF)
Box 74400
Milwaukee, WI 53274-0400

Make sure the check amount equals the total amount on your list/coupon.

3. Required Information

Please check to make sure that your Employer Withholding List/Coupon contains:

Information about your company:

• Company name
• Your company’s KIDS Employer ID number

Information about each employee:

• Withholding date - the date you withheld the support obligation amount from the employee's wages
• Employee’s name - first name, middle initial and last name
• Employee’s KIDS PIN and SSN
• Payroll frequency - the frequency with which you pay employee wages (e.g., weekly, bi-weekly, monthly, etc.) Codes for the frequency types are:
• Monthly 1
• Semi-monthly 2
• Bi-weekly 3
• Weekly 4
• Other 5
• (Use "other" for commissions, bonuses, etc.)
• Gross income Click here for gross income definition
• Amount withheld - the total support amount you withheld from the employee's wages. If an employee has more than one support order, add the amounts together and list the total amount.

The above items are critical to ensure support payments are distributed correctly if your employee has more than one court order or more than one debt.

4. Withholding List Changes Coupon

Complete and return the change list/coupon noting any changes that should be made.

• If your business address is incorrect, please indicate this by marking an "x" in the "Address Change" box. Write your correct address on the face of the Employer Withholding List/Coupon.
  
• If you do not want to receive this list because you plan to generate your own Employer Withholding List/Coupon, mark an "x" in the "Discontinue Lists" box.
  
• If you currently receive the Employer Withholding List/Coupon for one employee, you should create your own list/coupon for an additional employee. Your list/coupon should include the same required information as the Employer Withholding List/Coupon. Click here for the required information. The following month, you will receive an Employer Withholding List/Coupon that includes both employees’ names.
  New Click here to download a coupon for the new or additional employee.
  
• To add an employee to your employer withholding list/coupon that already includes more than one employee because you received an Income Withholding Notice for an employee whose name is not on the list, add his/her name and the related data (KIDS PIN and SSN) to the "Added Employee Table" in the section labeled "Withholding List Changes Coupon." You must also complete the payroll frequency, gross income, amount withheld and date of withholding for the added employee. Your next month’s withholding list/coupon should have the new employee’s name and information.
  
• To remove an employee name from your Employer Withholding List/Coupon, mark an "x" in the "No Longer Employed" box. If known, please write the employee’s termination date directly below the employee’s name. Do not remove if the employee is temporarily laid off, receiving worker's compensation/disability or is a seasonal worker and will return next season.

5. Commonly Asked Questions

Should I show separate amounts for each obligation for an employee if that employee has more than one income withholding order/notice?
No, just indicate the total amount withheld for each employee. Do not list an employee twice even if they have more than one obligation or more than one withholding order/notice.

What if I don’t have the employee’s KIDS PIN number or my Employer ID Number? Where do I find it?
The employee’s KIDS PIN Number and your Employer ID Number are on the income withholding notice/order you received. Your Employer ID Number is also on the Employer Withholding List/Coupon. You may call your local child support agency to obtain either number. Click here for a directory of child support agencies.

Why do I have to submit gross income and payroll frequency? Can I submit this information just once?
Some orders are expressed as a percentage of gross income. To determine if the full amount of support is being paid, the gross income is needed. Gross income is also required so that child support will be paid before any other obligations owed by your employee (e.g., birth costs, unpaid support, and fees). If your employee has more than one court order, the gross income is needed for calculating the support amount for each order. Gross income information is also needed with every payment because in many cases the gross income amount fluctuates. Gross income information is required by statute (section 767.265 (3h) Wis. Stats.).

Payroll frequency can change if bonuses and commissions are paid. KIDS, the child support computer system, utilizes gross income and payroll frequency with each transaction for proper distribution of funds, but does not make use of the previously provided information on future payments. Checks and list/coupons are electronically scanned. Each day, the WI SCTF receives 18,000 payments totaling an average of $3 million. To calculate the payment correctly, the payroll frequency is required.

6. More Information

• For more information about your list/coupon, please call the WI SCTF, weekdays 8:00 AM – 5:00 PM (CST), at:
  • 877-209-5211 (toll free) or
  • 414-615-2581 (metro Milwaukee)
    
• For information about electronic funds transfer, please call the WI SCTF at 414-615-2422
  
• For questions about calculating the amount to withhold, contact the county/tribal child support agency. Click here for a directory of child support agencies.

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