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APA Explains Tip Income and Wage Withholding in March Child Support Report

BY: William Dunn, CPP | 03/25/20

APA’s article, “What to Know About Tip Income and Wage Withholding” appears in the “Employer Corner” column of the March Child Support Report, a monthly e-newsletter published by the federal Office of Child Support Enforcement.

The article focuses on when tips, under federal law, may be subject to withholding for a garnishment such as child support. The answer lies in the application of the tip credit, through which employers may pay certain tipped employees a sub-minimum wage with a portion of the tips applied to the federal minimum wage. State laws also apply, and the article notes the eight states and territories that prohibit use of the tip credit. In those states, all tips are free from wage garnishment.

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William Dunn, CPP, is Director of Government Relations for the APA.