Many of our clients and readers have questions about the second round of stimulus checks and child support and how or if the money will be divided between co-parents. Important Note: We are not tax professionals. For tax questions related to how the second round of stimulus checks will affect you, please consult with your tax professional.
When will I get my check?
The Treasury is expected to act very quickly to get the checks into the hands of those who need them. Experts expect payments to start going out as early as next week.
How much will my check be?
The legislation includes a $600 payment for an adult – $1,200 for a married couple filing jointly – plus $600 per dependent child under the age of 17 at the end of the tax year. The bill uses the same definition of “child” as for the child tax credit. There is no cap on the number of children that qualify. Children over the age of 17 that are still dependents as well as adult dependents do not qualify for this round of stimulus payments.
The stimulus payment also includes a phaseout if you made more than $75,000 and several levels of reduction for those who reported making more than that. This, again, is based on your 2019 taxes. So if you reported a considerable income in 2019 but lost your job and have had no income for large portions of 2020, you will not be issued a check automatically. Consult your tax professional to see how this advance on the tax credit will affect your 2020 tax filing.
You can calculate your potential check amount at this Forbes link.
My ex got the last stimulus check? Will I get the second one?
Unlikely but possibly. The second round of stimulus checks is based on the same information as the first one – your 2019 tax return. The person who claimed the children on the 2019 tax return will be the person who gets the extra stimulus payment for the children when checks are issued. If your first check was based on 2018 tax return information because you had not yet filed in 2019, and you have since filed your 2019 taxes, this may change your stimulus check situation. Many divorced or separated parents claim the children on an even year/odd year rotation, as every-other is often considered the most fair way to rotate tax benefits. Nobody could have anticipated the global pandemic and the stimulus payments, so it’s unlikely that your existing parenting plan agreements could have prepared for such a unique situation.
Will my stimulus check be seized if I owe back child support?
Probably not, but possibly. Unlike the first round of stimulus checks under the CARES Act, the second piece of legislation specifically blocks the IRS from this. The bill says “no applicable payment shall be subject to execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.”
This only prevents the seizure of this money prior to the money being deposited into your account or a check being issued to you. Once you have the money, this may not prevent a judge from ordering you to pay your outstanding support or judgment with the money. You should consult with an attorney about your specific situation in family court and consult with a tax professional to determine your specific tax situation.
One possible exception to this would be if you did not file a tax return for 2019 and do not receive the check. Because direct payments are technically an advance on a 2020 tax credit, if you file your 2020 taxes in the spring of 2021 and receive your payment at that time, the stimulus check amount will be lumped into your general tax refund, which can be seized for back child support.
If you are the parent who is owed backed child support, this means that you will not necessarily receive the seized amount as you normally would with a tax refund for the direct payment of the second stimulus check to your opposing party.
My new spouse’s first stimulus check was seized to pay my back child support. How do they get that money back?
One of the theories about why the second stimulus check does not allow for child support seizure is due to the fact that as many as 50,000 married couples were affected by a glitch in the first round of stimulus payments where a new spouse’s portion of the payment was seized along with the spouse who owed back child support.
If this affected your family, the IRS released directives on how to file Form 8379, Injured Spouse Allocation in order to recoup that money.
What if I have more kids now than I did on my 2019 tax return?
Your check will be based on the number of dependents on your 2019 tax return. If you have more dependents when you file your 2020 taxes, you’ll receive the direct payment for your additional dependents as part of your general tax refund in 2021. Again, please consult your tax professional.
What if I got divorced in 2020 or my divorce is still in progress?
As you likely already learned during the first round of economic impact payments, your stimulus payment is based entirely on your 2019 tax return. If you filed jointly in 2019, your payment will be deposited into the same bank account or your check will be mailed to the same address as your 2019 filing.
If you have access to the bank account that the stimulus is deposited into, but your ex or estranged spouse does not, please consult with your divorce attorney about your next steps before spending or moving the money. If you do not have access to the account and your ex does, your divorce attorney can also give you guidance about how to get your share of the stimulus payment.
If your divorce is not finalized yet, the division of stimulus funds will likely be part of larger financial settlement agreements that must be made regarding your shared property and finances. Make sure that your attorney is aware of all money that you expect from the stimulus payments or any deposits or checks that you’ve received.
If your divorce is already finalized, tax issues addressed in your marital settlement agreement may govern how the payments are allocated. If your agreement doesn’t address taxes, you may need a mediator or your attorney’s assistance to bring the matter before the judge for post-divorce judgment. Your legal fees may exceed the amount of the stimulus payment, so mutual agreement, compromise, or mediation may be better first steps than immediately rushing to court.
I want half of the stimulus payments for my kids. How do I get it?
Here’s the part where you really need to consult a tax professional. While many people are choosing to involve the court system to try to have their ex ordered to share the stimulus payments for the shared children, some experts believe that “double dipping” is possible.
According to this recent CNet article:
In situations like these, it’s possible that stimulus payments for dependents could be sent to one parent but not both parents. If that happens, the parent who did not receive the money can claim it on their 2020 tax return and receive it along with any refund due in 2021, according to Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. “Double dipping,” in this instance, isn’t a glitch — both parents could technically qualify for the $600 payment (for a total payout from the US Treasury of $1,200 per child).
Your tax professional can provide further guidance for you.
If you cannot wait for the 2020 year tax filing for financial relief and have a good line of communication with your ex, talking about sharing the direct relief payment for the children may be an option – especially if you agreed to share the first one. In any case, a mutual agreement and compromise will be much more beneficial to both of you (and your children) than attempting to litigate the turnover of payments through the court system, especially considering that it will likely cost you far more in legal fees to bring the matter before the court than you are likely to recoup.
If you still have legal questions related to your divorce, custody, or child support situation, or if your family’s parenting plan needs to be revisited due to custody problems caused by the COVID-19 pandemic, please reach out to us to schedule a free initial consultation with one of our attorneys. Contact us online or call (815) 200-8802 today.