Exempt From IRS Levy: Wages, Benefits, and Bank Accounts

Federal law puts a specific list of income, benefits, and property out of the IRS’s reach when it levies for back taxes. The income exempt from IRS levy includes Supplemental Security Income, needs-based public assistance, service-connected VA disability compensation, court-ordered child support, and a portion of your wages tied to your filing status and dependents. On the property side, you keep necessary clothing and school books with no cap, up to $11,980 in household goods for 2026, and up to $5,990 in books and tools of your trade.¹ The list lives in Internal Revenue Code Section 6334, and it’s the only list that counts: state exemption laws do not apply to IRS levies.²

One warning before the details: some income that Section 6334 labels “exempt” can still be reached through a separate program called the continuous levy, which takes 15% of each payment. Social Security retirement, unemployment, and workers’ comp all fall into that gap. The categories matter more than the labels.

Income and Benefits the IRS Cannot Touch at All

These categories are fully protected from any form of IRS levy, including the continuous levy program discussed below:²

Supplemental Security Income (SSI) payments under Title XVI of the Social Security Act. These are needs-based payments for aged, blind, and disabled individuals, and the IRS excludes them from its automated levy programs.
State and local public assistance where eligibility depends on an income or means test.
VA disability payments tied to a service-connected condition under Title 38. Non-service-connected VA pensions are not on the statutory list and do not get this protection.
Social Security disability insurance (SSDI) benefits under Title II. The IRS removed SSDI from the Federal Payment Levy Program in October 2015.³
The portion of your wages needed to meet a court-ordered child support obligation for minor children.
Necessary clothing and school books for you or your family, with no dollar cap.
Undelivered mail addressed to you.

The 15% Continuous Levy: Where “Exempt” Becomes Misleading

This is the trap that catches most people. Several income sources that Section 6334 calls exempt from a standard one-time levy can still be hit by the Federal Payment Levy Program, which runs under IRC Section 6331(h) and takes up to 15% of each payment automatically, month after month, until the debt is paid or the levy is released.⁴

The payments the IRS can reach this way include:

Social Security retirement and survivors benefits (Title II). The 15% comes off the top with no minimum benefit floor for tax debts, which is different from how non-tax debts are collected against Social Security.⁵
Unemployment compensation.
Workers’ compensation, which Section 6334(a)(7) protects from a standard levy but which Section 6331(h) still reaches at 15%.²
Railroad Retirement Act payments and Railroad Unemployment Insurance benefits.
Military survivor annuities.

So if your only income is Social Security retirement and you owe back taxes, the IRS can take 15% every month without any additional notice beyond the original levy. SSI and SSDI are the clean exceptions on the Social Security side; everything else is fair game at the 15% rate.

How Much of Your Paycheck You Get to Keep

The IRS cannot take your entire paycheck. A minimum amount of your wages stays exempt based on your filing status and the number of dependents you claim, worked out from your standard deduction plus a per-dependent allowance spread across your pay periods.⁶ The IRS publishes the exact numbers each year in Publication 1494, which your employer uses to run the calculation.⁷

For a sense of scale: a single taxpayer paid weekly with three dependents keeps roughly $615 per pay period under the 2026 tables. Every dollar above that figure goes to the IRS.

One procedural detail controls how much you keep. When your employer receives the levy, they will hand you a Statement of Dependents and Filing Status. You have three days to return it. Miss that window and your employer must calculate the exempt amount as if you were single with zero dependents, the lowest figure on the table.⁶ Filling out and returning that form is the single most effective action you can take to protect your paycheck.

Bonuses and Commissions

Bonuses, commissions, and other one-time payments count as wages, but the math usually eats them. The exempt amount is set for the pay period, not for the bonus itself. If your weekly exempt figure is $615 and you receive a $5,000 bonus in that same pay period, the IRS takes everything above $615. The entire bonus often ends up with the IRS.⁶

Household Goods, Tools of Trade, and Your Home

Two categories of tangible property are protected up to inflation-adjusted dollar limits. For 2026:¹

Household goods up to $11,980. This covers fuel, food, furniture, personal effects, firearms for personal use, and livestock or poultry.
Books and tools of your trade, business, or profession up to $5,990.

These are aggregate caps, not per-item caps. If you own $15,000 worth of furniture and personal effects, the IRS can seize items above the $11,980 threshold. The revenue officer handling the seizure must appraise the property and set aside the exempt amount. If you disagree with that valuation, you can require the IRS to bring in three disinterested individuals for a fresh appraisal.

Your home gets its own protections. If your total tax debt is $5,000 or less, any real property you use as a residence is fully exempt.² For larger debts, the IRS still cannot seize your principal residence without first getting written approval from a federal district court judge or magistrate.⁸ The government has to petition the court, show that the debt remains unpaid and that no reasonable alternative exists, and give you a hearing. You cannot contest the underlying tax liability at that hearing, only whether the levy itself is appropriate. In practice this judicial hurdle keeps home seizures rare, but rare is not never.

Retirement Accounts Are Not Automatically Safe

A common misconception: the anti-alienation rules built into 401(k)s, pensions, and other qualified plans do not block an IRS levy. Federal regulations state explicitly that ERISA’s anti-alienation protection does not prevent enforcement of a federal tax levy.⁹

Internal IRS policy does treat retirement accounts as a last resort. Before levying, the IRS must determine that you’ve engaged in “flagrant conduct,” consider whether collection alternatives exist, and weigh whether you rely on the funds for necessary living expenses.¹⁰ The flagrant conduct test is waived if you voluntarily ask the IRS to levy your retirement account, which some taxpayers do to avoid early withdrawal penalties. The IRS can only collect what you have a current right to withdraw; if your only interest is in future payments you can’t access yet, the levy attaches but the plan isn’t required to send money until you become eligible.

Bank Accounts and the 21-Day Window

A bank levy freezes the account balance as of the moment the levy is received.¹¹ It’s a one-time snapshot. Deposits that arrive after the levy date generally aren’t swept up, though the IRS can serve a new levy later.¹²

The bank must hold the frozen funds for 21 days before sending them to the IRS.¹¹ That holding period exists so you can contact the IRS and prove that some or all of the money is exempt. If your account holds direct-deposited SSI payments, VA disability, or other protected income, this is your window to document the source and get those funds released. Bank statements that trace the deposits back to their exempt origin are the clearest evidence.

Joint accounts are vulnerable. If you share an account with someone who owes back taxes, the IRS can freeze the entire balance, including funds you deposited yourself. The non-liable owner has to contact the IRS during the 21-day window with documentation (statements, deposit records, pay stubs) showing which money belongs solely to them. Once the funds are sent to the IRS, recovery becomes much harder.

How to Actually Claim an Exemption

Exemptions don’t apply themselves. The process depends on what the IRS is going after.

Wage levies. Return the Statement of Dependents and Filing Status to your employer within three days. The numbers you report drive the Publication 1494 calculation your employer must follow.⁷ Your employer has no discretion to deviate.

Bank levies. Contact the revenue officer named on the levy notice during the 21-day holding period. Provide bank statements and other records tracing the frozen funds to an exempt source (SSI, VA disability, child support, and so on).

Property seizures. Assert your exemptions to the revenue officer at the time of seizure. Identify which items fall under the $11,980 household goods cap or the $5,990 tools of trade cap for 2026.¹ If you disagree with the officer’s appraisal, demand the three-person independent valuation.

Claiming an exemption protects a specific asset in a specific collection action. It does not stop the IRS from pursuing other assets or coming back later. If the underlying debt isn’t addressed, the levies keep coming.

1
Internal Revenue Service. Revenue Procedure 2025-32
2
Office of the Law Revision Counsel. 26 USC 6334 – Property Exempt From Levy
3
Social Security Administration. GN 02410.305 – Federal Payment Levy Program
4
Office of the Law Revision Counsel. 26 US Code 6331 – Levy and Distraint
5
Internal Revenue Service. Social Security Benefits Eligible for the Federal Payment Levy Program
6
Internal Revenue Service. Information About Wage Levies
7
Internal Revenue Service. Publication 1494 – Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income
8
eCFR. 26 CFR 301.6334-1 – Property Exempt From Levy
9
eCFR. 26 CFR 1.401(a)-13 – Assignment or Alienation of Benefits
10
Internal Revenue Service. 5.11.6 Notice of Levy in Special Cases
11
Internal Revenue Service. Information About Bank Levies
12
Internal Revenue Service. What If I Get a Levy Against One of My Employees, Vendors, Customers or Other Third Parties