IRS Updates Form Used for Payroll Withholding Agreements

To prevent tax levies, employees may enter into voluntary agreements with IRS to repay what’s owed. That means Payroll may end up withholding from their wages.

The form that an employee would fill out – Form 2159, Payroll Deduction Agreement – has recently been revised.

Here’s a look at what’s changed since the last IRS revision in May 2020.

Fees & Assistance Numbers

The most recent revision of Form 2159, dated July 2024, incorporates a lower user fee.

The new fee is $178. That’s down from $225.

Employees must agree that the amount can be deducted from their first payment.

As in the past, certain taxpayers may be eligible to pay a reduced user fee of $43.

There’s more explanation regarding this on the form now – i.e., the $43 fee applies to low-income taxpayers (those at or below 250% of federal poverty guidelines).

The $43 fee may be waived or reimbursed if certain conditions are met – that’s unchanged.

Another update you’ll notice on the latest version of Form 2159 is that there are new phone numbers to call for assistance. In addition, there are only two phone numbers now, down from three. They are:

• 800-829-3903 – for businesses as well as for individuals who are self-employed/business owners, and
• 800-829-7650 – for individuals who are wage earners.

Withholding the Specified Amount

Upon receiving a form from an employee, you can choose whether or not to participate in the payroll deduction agreement.

If you agree to withhold the specified amount, you’d indicate how often you’ll send the money to IRS.

The options are every week, two weeks, month or other. Your signature and other information is also required.