Opinion ID: 2394749
Heading Depth: 1
Heading Rank: 4

Heading: Federal Income Tax Refunds as Exempt Wages or Property

Text: The Plaintiffs also argue that the tax refund offset procedure, described above in greater detail, violates the exemption provisions of section 502. [4] They argue that their offset tax refunds constitute property exempted from administrative withholding under 14 M.R.S.A. § 4422 (Supp.1985-1986) and, alternatively, that the refunds represent weekly earnings withheld in violation of section 502(2). The Superior Court did not agree and concluded that the Plaintiffs' tax refunds were not exempt under either sections 502 or 4422. We agree with the Superior Court. Section 4422 sets out the specific kinds of property that are exempt from attachment. Payments from several sources, such as social security benefits, veterans' benefits, unemployment compensation, and certain money damages awards, are specifically exempt. 14 M.R.S.A. § 4422(13), (14) (Supp.1985-1986). The statute does not list federal income tax refunds as exempt property. The enumeration of specific types of money payments as exempt leads us to conclude that the Legislature intended that only those payments be exempt. See Lee v. Massie, 447 A.2d 65, 68 (Me.1982) (expression of one term in statute is the exclusion of another). Accordingly, we decline to find that offset income tax refunds are exempt property under section 4422. [5] Neither are we persuaded that the Plaintiffs' offset tax refunds represent weekly earnings withheld in violation of the limitation in section 502(2). In support of this contention, the Plaintiffs draw an analogy between the garnishment of wages and the weekly withholding of federal income tax from an employee's paycheck. They argue that the tax withheld is similar to garnished wages because it goes toward the satisfaction of a legal obligation. While it is superficially appealing, the analogy does not withstand analysis. Part of the amount withheld each week from an employee's paycheck goes towards the satisfaction of his tax liability. The remaining amount is not wages; rather, it is a form of debt owed by the government to the employee. In re Verill, 17 B.R. 652, 655 (Bankr.D.Md.1982); see Kokaszka v. Belford, 417 U.S. 642, 649-51, 94 S.Ct. 2431, 2435-2436, 41 L.Ed.2d 374 (1974) (tax refund not equivalent to wages under Consumer Credit Protection Act). Furthermore, the amount of weekly wages exempt from seizure is computed using the disposable earnings of the responsible parent as a base figure. 19 M.R.S.A. § 502(2) (Supp.1985-1986). The term disposable earnings is understood to mean that portion of a person's income remaining after payment of taxes and other legal obligations. Kokaszka v. Belford, 417 U.S. at 649 n. 8, 94 S.Ct. at 2435, n. 8; Black's Law Dictionary 423 (5th ed.1979). Under the Act, a support debtor's earnings are garnished based on the debtor's after-tax income. An income tax refund, unlike wages that have been subjected to trustee attachment, bears no relation to the amount of a support debtor's weekly earnings. We conclude that the Plaintiffs' argument lacks merit. The entry is: Judgment vacated. Remanded for further proceedings consistent with the opinion herein. All concurring.