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NPR 9620.1A
Effective Date: May 17, 2017
Expiration Date: May 17, 2027
Printable Format (PDF)

Subject: Payroll (Revalidated with Change 1)

Responsible Office: Office of the Chief Financial Officer

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Chapter 7. Withholding of Deductions From Gross Pay

7.1 Agency Requirements

The withholding of deductions from gross pay will be performed in accordance with applicable laws and regulations.

7.2 Authorization

7.2.1 Payroll withholding of deductions made from an employee's pay will be:

a. Properly authorized by the employee, or in accordance with applicable regulations.

b. Adequately documented.

c. Paid when due to the appropriate recipient in the amount authorized.

7.3 Types of Deductions

7.3.1 The two basic types of deductions are those which are:

a. Required by laws, regulations, or legal decisions, such as:

(1) Federal, state, and local income taxes and FICA.

(2) Retirement.

(3) Garnishments for alimony and child support.

(4) IRS tax levies.

(5) Other indebtedness to the U.S. Government.

(6) Federal Employees Health Benefit (FEHB) program.

(7) Federal Employees Group Life Insurance (FEGLI).

b. Voluntary, personal allotments to designated payees, such as:

(1) TSP.

(2) U.S. Savings Bonds, Series EE and I.

(3) Savings allotments.

(4) Combined Federal Campaign.

(5) NASA Employees Benefit Association life insurance.

(6) Dues to authorized employee organizations.

(7) Labor Union Dues.

7.4 Order of Withholding Preference for Deductions

7.4.1 NASA's order of precedence for withholding of deductions will comply with applicable laws, regulations, or other legal authority. These regulatory requirements including the following regulations in Definitions, 5 CFR §§ 550.301 (dealing with allotments), Back Pay Computations, 5 CFR § 550.805, Agency Regulations, 550.1104 (dealing with debt collection via salary offset), Exclusions, 5 CFR § 581.105 (dealing with garnishments for child support and/or alimony), and Exclusions, 5 CFR § 582.103 (dealing with garnishments for commercial debt). Consistent with Authority of Agency, 5 CFR § 550.311, retirement deductions under the Civil Service Retirement System (CSRS) or the FERS will be made before any other deduction (except in the case of back pay as provided in 5 CFR § 550.805. Also, as required by Installment Deduction for Indebtedness to the United States, 5 U.S.C. § 5514(d), a levy pursuant to the Internal Revenue Code takes precedence over salary offsets under 5 U.S.C. § 5514 (dealing with offsets to recover a debt due the United States Government).

7.4.2 When the gross pay of an employee is not sufficient to permit all deductions required by law to be made, the deductions will be taken in the following order, unless specified otherwise by a bankruptcy court under the bankruptcy laws of Title 11 of the United States Code or under the laws of Title 5 of the United States Code. In such instance, the court's order will be followed. NASA will use the following order of precedence for applying deductions from the gross pay of its civilian employees when gross pay is not sufficient to cover all authorized deductions.

a. Retirement (CSRS or FERS) (except in the case of back pay, use the order of deductions as provided in 5 CFR 550.805(e).

b. FICA tax or Medicare tax.

c. Federal income tax.

d. Health insurance premiums (current pay period and, if owed by employee, for up to four pay periods immediately preceding the current period).

e. Basic group life insurance premiums.

f. State income tax.

g. Local income tax.

h. Mandatory repayment of debts to the United States including unpaid advances of pay, travel, etc.

i. Court-ordered garnishment for alimony and child support payments.

j. Commercial Garnishments.

k. Voluntary alimony or child support payments.

l. Court-ordered bankruptcy payments under Title 11 of the United States Code.

m. Optional life insurance.

n. Voluntary repayments of indebtedness to the United States.

o. All other voluntary deductions, including TSP or repayment of TSP loans.

p. IRS levy for back Federal income taxes (based on net take-home pay).

7.5 Other Deductions

7.5.1 Deduction to Collect Erroneous Payment. 5 U.S.C. § 5514 authorizes that deductions may be made from the current pay of employees to satisfy indebtedness incurred as the result of an erroneous payment to or on behalf of the employee. Authorized NASA officials in accordance with NPD 9645.2, Claims of Erroneous Payment of Pay and Allowances, Travel, Transportation, and Relocation Expenses and Allowances, makes determination of indebtedness of the employee. When it is found an erroneous payment has been made, the employee involved will be notified, in writing, regarding the indebtedness.

7.5.2 Deduction to Collect Delinquent Federal Income Tax. Levy and Distraint, 26 U.S.C. § 6331 permits district directors of the IRS to levy on the accrued salary or wages of any employee of the United States in order to satisfy a tax liability. Before the IRS issues a notice of levy, employees may arrange with the IRS to liquidate their tax liability by voluntary payroll deductions. Settlement through Payroll Deduction. When an employee makes a satisfactory arrangement with the IRS to liquidate their tax liability by payroll deduction, an original IRS Form 2159, Payroll Deduction Agreement signed by the employee and the IRS will be delivered to the NPO. The IRS Form 2159 will specify the amount to be deducted each pay period, the employee's tax account number, and the number of consecutive pay periods the deduction will be made. Settlement by Levy. As a general rule, IRS Form 668-W Notice of Levy on Wages, Salary, and Other Income, will be served directly on the payroll certifying officer by the IRS. A levy upon wages or salary is continuous from the date the levy is first made until the liability giving rise to the levy is satisfied or until a release of levy is received from the IRS. Payroll deductions will be made according to the order of precedence shown above.

7.5.3 Jury Duty Fees. Under the provisions of Fees for Jury and Witness Service, 5 U.S.C. § 5537, no jury fees are paid to employees who are called upon for jury service in any court of the United States and, therefore, no collection is required. Every effort will be made to collect any fees paid the employee by state courts for jury duty. However, the part of the fee received for periods of jury duty which are for time not within the employee's normal workday or week and consequently not covered by court leave for jury duty, may be retained by the employee. The employee may retain amounts received by an employee that are specified by the court as reimbursement for expenses, (i.e., traveling expenses) rather than compensation. Prior to collection, Center payroll offices will determine, based on the applicable local jurisdiction laws governing the court, whether jury fees paid to employees constitute reimbursement for expenses in lieu of compensation for services. If direct collection is not made, the amount due will be collected by payroll deduction.

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