Lump sum payments are considered employee income and are subject to withholding to collect past-due child support. Employers that have received an income withholding order that includes an amount for past-due support:
Must notify Child Support before making any lump sum payment of $1,000 or more
- May notify Child Support of lump sum payments less than $1,000 or of an amount yet to be determined.
The following lump sum requirements apply to all lump sum payments reported to Child Support.
"Lump sum payment" includes pay in lieu of vacation or other leave, bonuses, commissions, and any other payment to an employee but does not include periodic payments made on regular paydays as compensation for services or reimbursement for expenses incurred by the employee on behalf of the employer. Also not included are severance pay and advances.
Employers must report lump sum payments to Child Support Employer Relations Administrator at email@example.com or 701-328-7528. The report must include:
- Employer's name;
- Employer contact name and phone number;
- Employee's name;
- Employee's remittance identifier (found on the Income Withholding Order/Notice for Support); and
- The amount of the lump sum payment.
If the withholding amount has not been met through the normal pay cycle, the employer needs to withhold the income withholding amount from the lump sum and remit a payment to Child Support. Once the current withholding amount has been met, the employer must then report the remaining balance of the lump sum to Child Support.
An employer who reports a lump sum payment to Child Support may initially release one-half of the payment to the employee. The employer may not release the second one-half of the payment to the employee until whichever occurs first, (1) thirty days have passed since the employer notified Child Support about the lump sum or (2) Child Support gives the employer written authorization to pay the employee the second one-half of the payment. However, the employer must retain the entire lump sum payment upon notification from Child Support of an execution, garnishment, attachment, or other process.
The employer may pay out the entire lump sum payment to the employee if Child Support does not contact the employer within 30 days from the employer's report of the lump sum payment that an execution, garnishment, attachment, or other process has been initiated.