Short answer
The Federal Payment Levy Program lets the IRS automatically take part of certain federal payments: generally up to 15% (IRS.gov, 2026) of Social Security retirement benefits, federal pensions and some federal salaries, and up to 100 percent of federal contractor and Medicare provider payments. SSI is not levied. A payment plan or hardship status usually takes you out.
Key takeaways
- The FPLP is a continuous, automated levy (IRC 6331(h)) run with Treasury’s Bureau of the Fiscal Service; one levy keeps taking part of each covered payment.
- Most covered payments are levied up to the program cap; federal vendor and Medicare provider payments can be levied up to 100 percent.
- SSI, Social Security disability insurance, children’s benefits and the lump-sum death benefit are not levied through the program.
- A CP90 or LT11 gives you a hearing window first, and Social Security levies need an extra CP91; federal contractors can be levied first and offered a hearing afterward.
- Bankruptcy, innocent or injured spouse claims, a payment plan, an offer or hardship status keep or take you out of the program.
What the Federal Payment Levy Program is
The Federal Payment Levy Program (FPLP) is an automated levy. IRC 6331(h) lets the IRS place a continuous levy on certain federal payments, and the IRS runs it with the Treasury Department’s Bureau of the Fiscal Service (BFS), using the same Treasury Offset Program that collects other federal debts. The IRS sends BFS a file of overdue accounts; when a match turns up a federal payment due to you, BFS cuts the payment and sends the levied part to the IRS.
- It is continuous. Publication 594 says the IRS serves the levy once, not each time you are paid. It continues until the balance is paid, other arrangements are made, the collection period ends or the IRS releases it.
- You get a letter each time. The IRS says BFS sends a letter of explanation each time a payment is levied, naming the payment and telling you to contact the IRS.
- Call the IRS, not the paying agency. The IRS says not to contact BFS, the Office of Personnel Management (OPM), the Social Security Administration or any other federal agency about the levy. They cannot stop it.
- Both spouses can be matched. The IRS manual says that since January 2006 the program also matches federal payments to the second spouse on a joint balance.
This is a levy for back taxes. It is different from a refund offset, where the IRS keeps your tax refund, and different from Treasury offsets for non-tax federal debts such as defaulted student loans.
Which federal payments it reaches, and how much
The law caps the levy at 15% (IRS.gov, 2026) of each payment, or the amount you owe if that is less, except for payments to federal vendors and Medicare providers, where it can take up to 100 percent (IRC 6331(h)(3)). Payments based on income or assets (means-tested payments) are not covered. Here is what the IRS lists:
| Federal payment | Levied through the FPLP? | Notes |
|---|---|---|
| Social Security retirement and survivors benefits (Title II) | Yes, up to 15% | A separate CP91 notice comes first. See can the IRS take my Social Security. |
| Social Security disability insurance (SSDI) | Not systemically | The IRS stopped levying SSDI through the FPLP on October 5, 2015. Children’s benefits and the lump-sum death benefit are also excluded. |
| Supplemental Security Income (SSI) | No | The IRS says SSI under Title XVI is not levied through the FPLP. |
| Federal civilian retirement annuities (OPM: CSRS and FERS) | Yes, up to 15% | Thrift Savings Plan annuity payments are not levied through the FPLP; TSP accounts follow the rules in retirement account levies. |
| Military retirement | Yes, up to 15% | The IRS manual says retirees receiving disability payments and Medal of Honor recipients are excluded. |
| Federal civilian employee salaries (some payroll centers) | Yes, up to 15% | Figured on pay after current taxes, health insurance, retirement contributions and court-ordered child support. Active-duty military pay is not included. |
| Railroad Retirement Board benefits | Yes, up to 15% | The IRS manual says the Tier 2 portion is not levied. |
| Federal employee travel advances and reimbursements | Yes, up to 15% | |
| Payments to federal contractors and vendors, including Defense contracts | Yes, up to 100 percent | The levy can come before any hearing (next sections). |
| Medicare provider and supplier payments | Yes, up to 100 percent | Medicaid payments are not in the FPLP; the IRS manual says they may still be levied by other means. |
No minimum is protected. For non-tax federal debts, the first $750 a month of Social Security is off limits. The IRS says that protection does not apply to tax levies: the FPLP takes its share “regardless of whether or not the remaining benefit sent to you is less than $750.” If you get two kinds of covered federal payments, each one can be levied at the allowed share.
The notices before and after a federal payment levy
Most federal payment levies start with a final notice that gives you Collection Due Process (CDP) hearing rights. The IRS levy programs toolkit lists these notices:
| Notice | Who gets it | What it means |
|---|---|---|
| CP90 / CP297 | Individuals / businesses | Final Notice: Notice of Intent to Levy and Notice of Your Right to a Hearing. Sent when the IRS finds a matching federal payment, if another final notice (such as an LT11) has not already been issued. |
| CP91 / CP298 | Individuals / businesses | Final notice before a levy on Social Security benefits. You have 30 days from its date to make arrangements before the IRS starts taking its share of each monthly benefit. |
| CP90C / CP297C | Federal contractors | Post-levy notice: the levy has already started, and the notice gives you a hearing right afterward. |
| CP297A | Businesses with employment taxes | Post-levy notice for a disqualified employment tax levy, used when the business requested a CDP hearing on employment taxes for other periods within the past 2 years. |
The IRS says that if it doesn’t hear from you within 30 days (IRS.gov, 2026) of the final notice, it sends the levy electronically to BFS. A timely Form 12153 hearing request generally stops the proposed levy while Appeals considers a payment plan, an offer or hardship status. Our 30-day final notice plan covers the request, and the CDP hearing explainer explains what the hearing can do.
Federal contractors and Medicare providers: the 100 percent levy
For a business paid by the federal government, the FPLP is the harshest levy there is. Payments due to a vendor of property, goods or services sold or leased to the federal government, and Medicare provider and supplier payments, can be levied up to 100 percent (IRC 6331(h)(3)). The IRS manual says the program levies 100 percent of covered civilian and Defense contractor payments and of Medicare Part A and B payments.
There is also less warning. IRC 6330(f) lets the IRS serve a “Federal contractor levy” before offering a hearing. You get the CP90C or CP297C notice afterward, with a hearing right then. The IRS’s CP90C page says the IRS is “permitted to issue levies to federal contractors without providing prior Collection Due Process rights.”
What that means in practice:
- Cash flow stops. A contract payment you counted on for payroll can go entirely to the IRS. If the balance includes unpaid payroll taxes, the people responsible can also face the trust fund recovery penalty.
- The fix is a resolution, not a call to the agency. The contracting agency cannot release the levy. Only an IRS release, usually after a payment plan, does.
- Payment plan limits differ for businesses. A business without trust fund taxes can use a Simple Payment Plan (formerly the streamlined installment agreement) up to $50,000 (IRS.gov, July 2026); with trust fund taxes the limit is $25,000 (IRS.gov, July 2026). See payroll tax rules for small businesses and our guide for small business owners.
When the IRS leaves you out of the program
The IRS says federal payments are not included in the FPLP when you are in bankruptcy, have applied for relief as an innocent or injured spouse, have made other arrangements to pay, or the IRS has determined you are in a hardship situation. The IRS manual adds pending or approved installment agreements and offers in compromise, open disaster or combat zone cases, certain pending claims, and some accounts close to the end of the collection period. If an account that is already in the program moves into one of these categories, the manual says it drops out of the FPLP automatically.
Low income filter. Since February 2011 the IRS has screened out some people who receive Social Security, Railroad Retirement or military retirement payments when their estimated total income falls below a set level tied to the federal poverty guidelines. The filter is automatic, and it does not apply in every case: the IRS manual says, for example, that people with unfiled tax returns skip the filter and are selected anyway. If you think your income is low enough and a levy started, call and ask the IRS to review your account for hardship.
The lesson: filing missing returns and getting into a payment plan or hardship status is what takes you out of the program. Our guides to currently not collectible status and pausing IRS collection explain how each works.
How to stop or release a federal payment levy
- Find the notice and the payment. Look for the CP90, CP91 or LT11 and any BFS letter showing which payment was levied. Your IRS Online Account shows the balance by tax year.
- Use the hearing window if it is still open. If the 30 days after a CP90 or LT11 has not passed, file Form 12153. A phone call does not extend that deadline.
- Call the IRS number on the notice. The IRS lists 800-829-7650 and 800-829-3903 for FPLP levies, to resolve the levy by paying the balance, entering an installment agreement or proposing an offer in compromise. Ask in the same call for the levy to be released.
- Set up the fix that fits. Individuals who owe $50,000 (IRS.gov, July 2026) or less can usually set up a Simple Payment Plan online. If your income does not cover basic living expenses, ask for hardship status instead; IRC 6343(a)(1) requires release when a levy creates an economic hardship.
- Check the next payment. Make sure the next benefit, annuity or contract payment arrives in full. If the IRS agreed to release the levy and it continues, call back; the free Taxpayer Advocate Service (877-777-4778 (IRS.gov, 2026)) can help when a levy is causing a hardship.
A release stops future takings; it does not automatically refund what BFS already sent. That is a separate request explained in getting levied money back. Retirees will also find the options for their situation in Fresh Start for seniors and retirees.
Doing it yourself, and when to get help
If you receive Social Security or a federal pension and owe a balance you can pay over time, an online payment plan and one phone call are often all it takes. Low Income Taxpayer Clinics represent eligible taxpayers for free or a small fee, and the Taxpayer Advocate Service helps with hardship cases.
A representative is worth considering when you are a federal contractor or Medicare provider facing a 100 percent levy, payroll taxes are involved, you owe more than the online plan limits, a revenue officer is assigned, or you need an offer or hardship case built. Global Gate Tax Relief offers a free, no-obligation consultation. If it takes the case, it files Form 2848, pulls your IRS transcripts and quotes a flat fee upfront. In urgent levy cases it can often act within 24 to 72 hours of engagement, though release timing depends on the IRS, and it makes no promises about outcomes. Request a free case review or call 1-877-800-8180.
Frequently asked questions
Yes. Social Security retirement and survivors benefits can be levied through the Federal Payment Levy Program, generally up to 15% of each monthly payment. The IRS sends a CP91 notice first and waits 30 days from its date before it starts. Disability insurance benefits have not been levied through the program since October 5, 2015.
Not through the Federal Payment Levy Program. The IRS says Supplemental Security Income under Title XVI is not levied through the FPLP, and IRC 6331(h) excludes payments based on income or assets.
Yes. Federal civilian retirement annuities from OPM and some federal civilian salaries are in the program, generally up to 15% of each payment. For salaries, the share is figured after taxes, health insurance, retirement contributions and court-ordered child support. Active-duty military pay is not included.
Yes. For vendors of goods or services to the federal government and for Medicare providers and suppliers, the levy can take up to 100 percent of each payment (IRC 6331(h)(3)). Federal contractor levies can also be served before a hearing; you get a CP90C or CP297C with hearing rights afterward.
No. That protection applies to non-tax federal debts. The IRS says the FPLP levies its share of Social Security even if the remaining benefit is less than $750.
The IRS, at the number on your notice. The IRS lists 800-829-7650 and 800-829-3903 for FPLP levies and says not to contact BFS, OPM, the Social Security Administration or other agencies, which cannot stop the levy.
Yes, in most cases. The IRS excludes accounts with approved installment agreements from the program, and entering an agreement is a ground for releasing a levy unless the agreement says otherwise. Ask for the release when you set up the plan.
Sources
- IRS: Federal Payment Levy Program (reviewed 30 Apr 2026)
- IRS: Social Security benefits eligible for the Federal Payment Levy Program
- IRS: Levy programs toolkit
- IRS: Understanding your CP90 notice
- IRS: Understanding your CP91 notice
- IRS: Understanding your CP90C notice
- IRM 5.19.9, Automated Levy Programs (rev. 02-19-2026)
- IRS Publication 594, The IRS Collection Process (Rev. 1-2026)
- 26 U.S.C. 6331, Levy and distraint
- 26 U.S.C. 6330, Notice and opportunity for hearing before levy
- 26 U.S.C. 6343, Authority to release levy and return property
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