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1099 reporting of garnishment settlement

November 27, 2023
November 27, 2023


Q. If a company is paying a garnishment settlement to a collection agency for an employee, would that amount be 1099 reportable?  A. (Answered by IOFM's third-party tax experts) No, the payee of the garnished amount is not Form 1099 reportable.  The income which that garnished amount represents remains income of your employee.  As a result of the garnishment order a portion of the employee's income is being assigned to the collection agency, but that doesn't change the original character of the…

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