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 per RCW 26.23.063. 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
    • Vacation/holiday-pay cash-out options. 

When am I required to report these payments?

  • Report lump-sum payments as soon as possible, but preferably not earlier than one month prior to the payout date.
  • 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.