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Divorce, Separation, Support and the COVID-19 Stimulus Check

Stimulus checks designed to give folks a helping hand during the Coronavirus pandemic are likely to be hitting bank accounts and mailboxes soon. What does this mean for people who recently separated or who are going through a divorce?

Recap on amounts and eligibility:

  • Individuals earning $75,000 or less = $1,200
  • Individuals earning more than $75,000 but less than $99,000 = reduced amount
  • Head of Household earning $112,500 or less = $1,200
  • Head of Household earning more than $112,500 but less than $136,500 = reduced amount
  • Married filing jointly earning less than $150,00 = $2,400
  • Married filing jointly earning more than $150,000 but less than $198,000 = reduced amount
  • Parents with qualifying dependent children under the age of 17 will receive $500 per child
  • Parents with qualifying dependent children under the age of 17 whose income is too high to receive a stimulus check will not receive $500 for their children

Stimulus Calculator

The stimulus check is based on income from previous tax returns. The IRS is cutting the checks based on the information it has, so if you filed in 2018 have yet to file in 2019, the government will use the information from your 2018 tax returns. If you already filed in 2019, the newest information available will be used to determine marital status, number of dependents, the amount of the check, and the bank account (or last mailing address on file for paper checks).

The IRS will not know if a new baby was born, if spouses separated or divorced, or who has custody if it occurred since the last tax return was filed.

Some FREQUENTLY ASKED QUESTIONS

  • I had a baby in 2020 after my last filing. Will I get the extra $500 for my baby?

Not right now. We understand that the stimulus check is an advance on 2020 taxes. When you claim your new baby on your 2020 returns, you will likely receive your $500 stimulus check in the form of a credit as part of 2020 income tax return.

  • I last filed in 2018 but have since separated from my spouse. Where will the money go?

The money will be direct deposited to the bank account on file or a check will be sent to the last mailing address provided on the last tax return, depending on how you received your last an income tax refund. We understand that the Treasury Department intends to develop and launch an online portal that would allow individuals to provide their banking information to the IRS.

  • My husband and I filed in 2019 but we have since separated. He makes over $160,000 but I only make $30,000/year. Will I get a check?

Your last tax return is used to calculate the stimulus check you receive now but it is an advance on your 2020 tax return. You may be eligible to get a check when you file next year if your income is below the qualifying thresholds. You should consult with your tax advisor to be sure.

  • My spouse and I are divorcing and my spouse has control over the bank account where the check will be deposited. How do I get my share?

Your stimulus check is part of the marital estate and is subject to the laws in Virginia on property division. Virginia courts divide marital property based on what is fair - not automatically 50/50. The courts look at factors that are listed in Virginia Code §20-107.3. If your spouse receives the check, he/she should give you your half. Given that the individual amount is multiplied by two for married couples filing jointly, it is clear the intent is for each adult to receive some sort of economic benefit. However, there may be certain circumstances that require an uneven split of the proceeds. You should consult with your family law attorney on how to seek recovery of your portion of the stimulus money if your spouse is not sharing.

  • I am separated from the father of my children. We were never married so we always filed individually. Who will get the $500 for the children?

Presumably, whoever claimed the children on the last tax return that was filed will receive the money. If you alternate the years in which you claim your children, we suggest that the receiving parent split the check evenly with the other.

  • I fell behind on my child support last year. Will the amount of my check be reduced?

Most likely, yes. Just as the IRS intercepts tax refunds for child support arrears, this stimulus check will be subject to interception as well. But this really only applies to those whose support obligations are monitored by the Division of Child Support Enforcement. Court orders that require direct payment between the parties and that are not registered with an agency will not be the subject of a tax intercept.

USEFUL TIPS:

  • Share. Regardless of your relationship with your ex, it will be hard to argue why you kept (and maybe spent) the $2,400 stimulus check you received knowing it was sent for both you and your spouse. Given that the individual amount is multiplied by two for married couples filing jointly, it is clear the intent is for each adult to receive some sort of economic benefit.
  • Courts are closed for non-emergency matters. If you and your ex cannot agree on how the funds are to be split and you need a court to decide for you, it is wise to put that money away into a savings or a trust account and not spend it until a court weights in.
  • Contact us. We can walk you through your particular situation as it relates to your stimulus check. While we cannot predict how courts will decide, we can help you to understand the possible outcomes.

** The information contained in this article is for general information purposes. and is not an exhaustive overview of the CARES ACT. Nothing should be taken as legal advice for any individual case or situation. **

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