Q: I've got a state tax lien from the state Franchise Tax Board. With the new federal requirement that Social Security checks have to be received by electronic payment, I now have to open a bank account to get my monthly check. Does that mean my bank account could be garnished to pay my back taxes?
A: If the Franchise Tax Board (FTB) is notified that the bank account consists only of Social Security earnings, we would not garnish your account. Social Security income is excluded from state tax collection activity. It's important to note that having Social Security income does not stop withholding orders for earnings from being issued if the taxpayer is already in active collections and it also does not stop liens from being filed.
If you open a bank account and deposit your Social Security earnings, you should contact FTB to let us know. Otherwise, when we locate a bank account opened by a taxpayer who has a lien filed against him/her, we would take actions to levy or attach the bank account as part of our collection activity (as long as due process has been served). You'd then have to show proof that the deposits are Social Security and therefore not garnishable.
It is important to note that if you deposit other income into your new bank account, the FTB can levy those non-Social Security amounts. That's why it is important to contact us and provide substantiation as to what deposits are related to Social Security.Taxpayers can call the FTB at (800) 689-4776.
For more information about FTB's collection process, please visit ftb.ca.gov and search for FTB Publication 1140, Personal Income Tax Collections Information.
Thank you for your question.