How to Get an EDD Bank Levy or Wage Garnishment Released

The California Employment Development Department (EDD) is one of the most aggressive collection agencies in the state. If you owe payroll taxes, the EDD can issue:

• Bank levies (freezing your business or personal account)
  
  
• Wage garnishments (taking a portion of your paycheck)
  
  
• Liens and penalties that quickly escalate your balance
  
  

Unlike the IRS, the EDD can enforce collection without much notice — especially if you’ve ignored past letters or failed to file DE-9 returns.

If you’ve already been levied or garnished, here’s what you need to know:

You can still stop the damage and request a release — but you must act fast.

What Is an EDD Bank Levy?

An EDD bank levy is a legal action where the EDD freezes your bank account to collect unpaid payroll taxes. The levy is sent to your bank, which must hold the funds for 10 days before remitting them to the state.

EDD bank levies are typically used against:

• Employers who failed to respond to notices
  
  
• Businesses that owe back payroll taxes
  
  
• Officers or owners held personally responsible
  
  

Key Facts:

• Funds are frozen immediately
  
  
• The bank holds them for 10 days
  
  
• You can request a release during this window
  
  
• Once the money is sent to EDD, you may not get it back

What Is an EDD Wage Garnishment?

EDD wage garnishments allow the state to take a portion of your wages — usually up to 25% of disposable income — directly from your paycheck.

EDD may garnish wages from:

• Business owners assessed personally
  
  
• Employees of entities with shared liability
  
  
• Contractors misclassified as W-2 staff
  
  

Wage garnishments continue until the debt is paid or released.

How to Stop a Levy or Garnishment – Step by Step

1. Contact the EDD Immediately

Call the number on your notice or letter. You’ll need:

• The EDD account number or case number
  
  
• Your Social Security number or EIN
  
  
• The amount of the levy or garnishment
  
  

2. Request an Urgent Levy Release

Be clear: you’re requesting a “levy release due to hardship or resolution in progress.”

You may qualify for a release if:

• The levy causes severe financial hardship
  
  
• You’ve submitted a payment plan request
  
  
• You’re in the process of an Offer in Compromise
  
  
• You’ve filed missing returns and are coming into compliance
  
  

EDD requires supporting documentation. Send proof of bank balance, income, and monthly bills.

3. Submit a Payment Plan or Offer in Compromise (OIC)

A formal resolution can lead to immediate levy release:

• For open businesses: installment agreement
  
  
• For closed businesses or personal assessments: OIC
  
  

A CPA can negotiate terms, prepare financials, and push for fast action.

4. Challenge the Underlying Liability (If Applicable)

If the debt is based on incorrect assessments (e.g., estimated payroll), file a petition for reassessment or appeal.

Can You Get the Money Back After a Levy?

Sometimes — but only if:

• The levy was issued in error
  
  
• You were not properly notified
  
  
• You submit a timely refund request
  
  

Refunds must be justified and are rarely granted without legal or administrative error.

What Happens If You Ignore the Levy

If you fail to act:

• The bank sends your money to the EDD
  
  
• The garnishment continues paycheck to paycheck
  
  
• The EDD may file liens and increase penalties
  
  
• You may be referred for criminal prosecution in serious cases
  

How We Help

At Boulanger CPA, we represent California taxpayers in front of the EDD every week. We help clients:

• Stop levies and garnishments immediately
  
  
• Negotiate payment plans or settlements
  
  
• File penalty abatement and compliance packages
  
  
• Prevent future enforcement actions
  
  

📞 Call 657-218-5700 or Schedule your free strategy session,

📣 About the Author

Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.

He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.