Wage garnishment is a way for creditors to forcefully and legally take income that you owe to them. Creditors can only get a garnishment order from a legal court of law; once obtained, the order allows them to withdraw a portion of your paycheck before you receive it. The portion they withdraw is the garnishment portion --- it can only legally be a certain percentage of your earned income.
Garnished Wages Are Income
Gross income is the amount of money you earn before anything is taken out of your paycheck. When a creditor garnishes your wages, it's legally taking money out of the earned income on your paycheck for the purpose of paying a debt that you owe. A wage garnishment simply forces you to pay a specific bill before any others by taking the money for that bill before you actually receive it. This means the amount of money garnished isn't directly tax deductible.
Purpose of the Garnishment
The reason for your wage garnishment determines whether you may be allowed to claim all or part of the garnishment as an income tax deduction. When your employer notifies you of a wage garnishment order, it should supply you with information about the company that's levying the garnishment and what debt the garnishment is meant to repay. If you don't receive this information, contact the garnishment company and get this information.
Allowable Tax Deductions
The IRS does allow you to take tax deductions for specific types of purchases and payments, such as student loan interest payments. If you don't pay a bill, then you can't take the associated tax deduction. When your wages are garnished however, specifically to repay debts that are allowed as tax deductions, then you're paying the bill and may be qualified to claim it on your income tax returns.
Disallowed Tax Deductions
Most debt and interest payments aren't tax deductible. If you have delinquent credit card debt, for example, and the creditor garnishes your wages as a way to recoup that unpaid debt, it's not tax deductible. If your wages are garnished to pay off a repossessed car, judicial awards, child support orders and similar types of debt, then you can't claim them as tax deductions as they're not deductible when you pay them directly as part of your regular bills.