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Exempt income in New York: money creditors can't take to pay a judgment

Updated By The editorial teamNot reviewed by an attorney — based on the official sources below

In short

New York and federal law protect many kinds of income from being taken to pay a money judgment. These include Social Security, SSI, public assistance, unemployment, disability and workers' compensation benefits, veterans benefits, public and private pensions, child support and maintenance, and 90% of wages earned in the last 60 days. Retirement accounts such as IRAs and 401(k)s are generally protected too. If exempt money is frozen in your bank account, you claim it back with the exemption form your bank must mail you, within 20 days.

Read on for the details, the exceptions and the sources.

In plain words

Exempt
Protected by law from being taken by a creditor to pay a judgment.
Judgment creditor
The person or company a court has said you owe money to.
Direct deposit
Money paid electronically into your bank account, rather than by paper check.

What is it?

Exempt income is money the law sets aside so a person who owes a judgment can still pay for basic needs. The notice New York creditors must send when they restrain your property lists money that may be exempt: SSI; Social Security; public assistance; spousal support, maintenance or child support; unemployment benefits; disability benefits; workers' compensation; public or private pensions; veterans benefits; 90% of wages or salary earned in the last 60 days; railroad retirement; black lung benefits; and COVID-19 stimulus payments (CPLR § 5222(e)). The bank exemption notice adds income earned while receiving SSI or public assistance (CPLR § 5222-a(b)(4)).

The CPLR also protects personal property, such as clothing, furniture, a refrigerator, a television, a computer and a cellphone, and — up to set dollar amounts — a car, tools of your trade and some cash (CPLR § 5205(a)).

Who qualifies?

Any individual with a money judgment against them can claim these exemptions in New York. The bank-account protections in CPLR § 5205(l) and § 5222(h)–(i) apply to individuals' accounts at banks, credit unions and the other banking institutions defined in CPLR § 5205(n).

You don't need to have filed anything in the lawsuit to claim an exemption, and not returning the claim form in time doesn't waive the exemption (CPLR § 5222-a(c)(5)).

Exceptions

  • Child support, spousal support and debts owed to New York State or a local government: several bank-account protections don't apply if the restraining notice carries a bold legend saying so (CPLR § 5205(o), § 5222(k)).
  • Earnings: the 90% wage exemption gives way for any part a court finds unnecessary for the reasonable needs of you and your dependents (§ 5205(d)).
  • Retirement accounts: money added to an IRA or similar plan within 90 days before the creditor's claim was filed, or moved there in a voidable transfer, isn't protected (§ 5205(c)(5)).
  • Personal property exemptions, such as the car exemption, may not apply when the creditor is enforcing a judgment for the purchase price of that property (§ 5205(a)).

How much?

Most benefit income listed above is protected in full. For wages, 90% of earnings is exempt (§ 5205(d)(2)), and wage garnishment is limited further by CPLR § 5231. For money in a bank account:

  • Where exempt payments were directly deposited in the 45 days before the bank was served: a protected amount set at $2,500 in the statute and adjusted for inflation to $3,425 from April 1, 2024 (§ 5205(l); NY Department of Financial Services).
  • In any account: an amount equal to 240 times the minimum hourly wage can't be restrained (§ 5222(i)). With 2026 minimum wages, that is $4,080 at $17.00 an hour (New York City, Nassau, Suffolk, Westchester) or $3,840 at $16.00 an hour (rest of the state). The statute doesn't say which region's wage applies; ask the clerk or a legal-services lawyer if it matters to you.
  • Cash or a bank balance of $1,325 (as adjusted in 2024) if you don't claim a homestead exemption (§ 5205(a)(9)).
  • Payments from IRAs and qualified retirement plans: 100% (§ 5205(d)(1)).

How is it calculated?

Exempt money keeps its protection when it sits in a bank account, as long as you can show where it came from. When an account mixes exempt and non-exempt money and you claim an exemption, the creditor must apply the 'lowest intermediate balance' principle (CPLR § 5222-a(c)(4)): in plain terms, money spent from the account is treated as coming from non-exempt funds first, so the exempt deposits are what remain.

For federal benefits deposited directly — Social Security, SSI, VA benefits and federal retirement — your bank must also protect the total of those deposits over the previous two months when it receives a garnishment order (31 C.F.R. § 212.3, the 'protected amount').

What documents do you need?

  • Benefit award letters (Social Security, SSI, unemployment, pension, VA)
  • Pay stubs for the last 60 days
  • Bank statements showing the last two months of activity
  • Child support or maintenance orders and payment records
  • The exemption notice and claim forms from your bank

How do you get it?

  1. Use the exemption claim form

    Check each type of exempt money, sign the two forms, and send one to the bank and one to the creditor's lawyer (or the creditor if it has no lawyer) within 20 days of the postmark on the bank's envelope (CPLR § 5222-a(c)(1)).

  2. Attach proof

    Copies of award letters, pay stubs or two months of bank statements. If they show all the money is exempt, the creditor must have it released within 7 days (§ 5222-a(c)(4)).

  3. Or ask the court

    You can also ask the court directly to decide that your money is exempt; the notice cites CPLR §§ 5239 and 5240, and the clerk may have forms.

What if they refuse?

If the creditor objects, it must go to court within 8 days; your signed claim form is evidence that the money is exempt, and the creditor must prove what isn't. If the court finds the creditor disputed your claim in bad faith, it must award you costs, reasonable lawyer's fees, actual damages and up to $1,000 (CPLR § 5222-a(d), (g)).

Deadlines

  • 20 days from the postmark on the bank's envelope to send the claim forms (CPLR § 5222-a(c)(1)).
  • 8 days after the bank gets your form: the bank releases the funds unless the creditor has objected (§ 5222-a(c)(3)).
  • 7 days after the creditor gets your form with proof that all the money is exempt: the creditor must instruct the bank to release it (§ 5222-a(c)(4)).
  • The inflation-adjusted bank amount is next scheduled to change on April 1, 2027.

Figures that change

  • Protected bank balance with direct-deposited exempt payments in the last 45 days (CPLR § 5205(l)): $3,425 (effective April 1, 2024; next adjustment April 1, 2027) (as of 2026-10-30; Current dollar amount of exemption from money judgments (CPLR 5205, 5206; DCL 282, 283))
  • Cash or bank balance exempt if no homestead exemption is claimed (CPLR § 5205(a)(9)): $1,325 (2024 adjustment) (as of 2026-10-30; Current dollar amount of exemption from money judgments (CPLR 5205, 5206; DCL 282, 283))
  • Account amount a restraining notice can't reach — 240 × minimum wage (CPLR § 5222(i)): $4,080 at $17.00/hour; $3,840 at $16.00/hour (2026 rates) (as of 2026-10-30; N.Y. Labor Law § 652 — minimum wage)

Frequently asked questions

Is my tax refund exempt?

Federal COVID-era recovery rebates and certain refundable credits paid under the pandemic relief laws are exempt (CPLR § 5205(p)). Other tax refunds aren't on New York's general exempt list; whether part of one is protected depends on the facts, so ask a legal-services lawyer.

Can a creditor take money from my IRA or 401(k)?

Generally no. CPLR § 5205(c) treats qualified retirement accounts and IRAs as exempt trusts, and payments from them are fully exempt (§ 5205(d)(1)), except for contributions made within 90 days before the claim or in a voidable transfer.

I receive SSI and also work part-time. Is my pay protected?

The bank exemption notice lists income earned while receiving SSI or public assistance as a type of exempt money you can claim (CPLR § 5222-a(b)(4)).

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Official sources

This page was written from the sources below. “Checked” is the date the source was last opened and read.

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This page is general information based on the official sources listed, current as of the update date. It is not legal advice and does not replace a review of your own situation; if a case is already in court, a deadline is close, the amount is large, or there are criminal, immigration or family-law consequences, talk to a lawyer or legal aid.