I have a judgment against me resulting from a personal lawsuit with a commodity business. The State District Court has ordered 100% of my Federal and State income tax refund be given to the judgment creditor. Almost all of the income was derived from wages however some was from unemployment. The creditor has taken 25% of the wages (not unemployment) through the year in payroll deductions. Why are they entitled to a 100% of the refund and not just 25% since it can be traced directly to wages?

MukatA

Because there is a court order.

ksbaddebt

Cute answer but because a Judge orders it does not always make it right. I have had other orders overturned in this case. The logic to my question is valid and I would think it would have happen before but cannot find anything other then owing taxes and being garnished by IRS or the State in which case they can take 100%.

Now if someone has some meaningful information that supports or dispels the order I would appreciate it.

Thank you

AtlantaTaxExpert

What you are asking for is a LEGAL opinion.

This is a TAX forum, NOT a law forum, so you may be better served to transfer the posting to the LAW forum under AskMeHelpDesk.

ScottGem

I've moved this from the Tax forum. But you are missing the fundamental difference between salary and other assets. There is a limit on the percentage of wages that can be garnished because people live on their salaried income. An income tax refund is often found money and not truly planned for. Its considered a windfall and, therefore, subject to 100% attachment.