No, we do not believe that the account funds would be subject to the tax levy. Social security payments are protected public benefit payments that are exempt from levy — provided that the payments were made by direct deposit and tagged as public benefit payments.

When a bank receives a levy or other type of garnishment order, it must perform an account review, looking back two months to calculate the amount of protected public benefit payments in an account. The protected amount is “the lesser of the sum of all benefit payments posted to an account between the close of business on the beginning date of the [two-month] lookback period and the open of business on the ending date of the lookback period, or the balance in an account when the account review is performed.” In this case, you have indicated that the amount of social security benefits payments from the past two months exceeds the account balance. Consequently, the entire account balance is protected, meaning that it is entirely exempt from the tax levy.

For resources related to our guidance, please see:

• 31 CFR 212.6 (“The following provisions apply if an account review shows that a benefit agency deposited a benefit payment into an account during the lookback period.”)

• 31 CFR 212.6 (“The financial institution shall immediately calculate and establish the protected amount for an account. . . . A protected amount calculated and established by a financial institution pursuant to this section shall be conclusively considered to be exempt from garnishment under law.”)

• 31 CFR 212.3 (“Garnish or garnishment means execution, levy, attachment, garnishment, or other legal process.”)

• 31 CFR 212.3 (“Benefit agency means the Social Security Administration (SSA), the Department of Veterans Affairs (VA), the Office of Personnel Management (OPM), or the Railroad Retirement Board (RRB).”)

• 31 CFR 212.3 (“Benefit payment means a Federal benefit payment referred to in § 212.2(b) paid by direct deposit to an account with the character ‘XX’ encoded in positions 54 and 55 of the Company Entry Description field and the number ‘2’ encoded in the Originator Status Code field of the Batch Header Record of the direct deposit entry.”)

• 31 CFR 212.3 (“Protected amount means the lesser of the sum of all benefit payments posted to an account between the close of business on the beginning date of the lookback period [of two months] and the open of business on the ending date of the lookback period, or the balance in an account when the account review is performed. Examples illustrating the application of this definition are included in Appendix C to this part.”)

• 31 CFR 212.3 (“Lookback period means the two month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier, or on the last date of the month two months earlier if the corresponding date does not exist. Examples illustrating the application of this definition are included in appendix C to this part.”)