Potential levy of disability benefits

A significant portion of the back pay will be seized. Ongoing monthly benefits also are subject to garnishment for taxes owed to the IRS. The ongoing garnishment is more restricted than the attachment of the back pay. The government cannot take any amount that would leave you with benefits less than $9,000 per year or $750 per month. And, it cannot take more than 15% of your total benefit. For example, if Doug receives monthly federal benefits in the amount of $900, the government may take either $150 (the amount of Doug's $900 benefit that is over $750) or $135 (15% of Doug's total benefit of $900), whichever is less. So, in this case, the government can take only $135 each month. Sorry I did not have better news for you. Best of luck to you both.

Suggest you contact a tax attorney now and see if you can negotiate a settlement with better terms before the back pay comes in. Best of luck to you.