It is not completely clear whether an adjustment should be made when the IRS is garnisheeing wages for back taxes or the state is garnisheeing wages for unpaid child support.

On the one hand, garnishment of wages represents an involuntary reduction in disposable income. Also, taxes and child support payments are normally considered as offsets to income.

On the other hand, the need analysis formula only considers the current year's income taxes and child support payments, and does not permit one to shift the obligation from one year to the next. For example, voluntary payments of back taxes and child support owed from previous years may not be used to increase the amounts reported on the FAFSA.

Back taxes and child support owed are considered debts. The definition of garnishment is the seizure of assets or wages to pay off a debt. The Federal need analysis methodology does not allow consideration of debts except when they are used as offsets in calculating the net worth of an investment, farm or business asset.

Accordingly, garnishment of wages should not be considered sufficient grounds for a professional judgment adjustment to income. It is acceptable to reduce the value of an asset corresponding to the degree of garnishment of the asset, since the garnishment represents a seizure of all or part of the asset. Liens likewise represent a reduction in the value of an asset. In addition, if a business or farm asset is sold as the result of garnishment, the financial aid administrator may use professional judgment to exclude from family income the proceeds of the sale, per Section 479A(b) of the Higher Education Act.