With the first Coronavirus Stimulus Checks scheduled to be issued on April 9th, I’ve had a few clients ask me about how these monies should be treated in situations of divorce or separation. Have you had the same thoughts? Or are you saying, Liz, I hadn’t even thought about how the Coronavirus Stimulus would present unique issues for divorced persons!
As I always say, don’t worry I got you! Here are my answers to some of the most frequently asked questions about what divorced persons can, and should do, when it comes to the Coronavirus Stimulus Checks.
How do I know if I or my co-parent is eligible for a Coronavirus Stimulus Check?
Whether you or your co-parent are eligible to receive a Coronavirus Stimulus Check is dependent on the gross income claimed on the last tax return that you filed. The IRS as well as many states, have extended their tax filing deadlines. As a result, many people have not filed their taxes for 2019 yet. Have you? If not, the IRS will be looking at your 2018 tax return to determine you and your coparent’s eligibility for the Coronavirus Stimulus monies.
Want some good news? There is nothing you need to do to get this Coronavirus Stimulus Check. There is no application required and the IRS will determine how much you are owed.
However, the Coronavirus Stimulus presents a unique challenge for parties who have recently separated or are recently divorced. Here are some scenarios unique to recently divorced or separated persons.
Did you and your spouse file together in 2018 because you were married but separated in 2019?
If neither of you have filed your 2019 taxes yet, the IRS will look at the incomes reported jointly on your 2018 return to see if you qualify for a Coronavirus Stimulus Check. Remember, the qualifications for a married couple are different than those for are for a single person. Also the Coronavirus Stimulus is bigger!
What if you are eligible on your own for a Coronavirus Stimulus Check but you would not be eligible based on your last filed return because your former spouse’s income alone was too high to qualify?
If that is the case and you have not filed your 2019 tax return, I suggest that you do it ASAP so that you can get your Coronavirus Stimulus Check. If you have filed your own 2019 return already, you should be all set to get your monies.
How will I get my Coronavirus Stimulus Check if the account we used for last year’s tax refund is closed because of divorce?
One of the first things that people do when they separate is close their joint bank accounts and open separate ones. Did you do this when you first separated from your spouse? This is something that I often tell clients to do in their first meeting with me. But this common action can present some unique challenges when it comes to the Coronavirus Stimulus Check.
Why?
If possible, the Coronavirus Stimulus Check is going to be directly deposited into the bank account that the IRS has on file for you. Let me explain why this can present an issue if you are recently divorced.
Did you get a refund last year? If so, you likely gave the IRS a routing and bank account number to deposit that refund. This is the bank account information that the IRS has for you. So, this is where your Coronavirus Stimulus Check is going to be deposited.
But what if you filed last year’s tax return jointly with your former spouse and so the bank account information that they have for you is a joint bank account. And what if that account is now closed? Because you are, you know, divorced?
Don’t worry, this doesn’t mean that you won’t get a Coronavirus Stimulus Check. However, it does mean that your money may be delayed. If the account is closed then the bank will reject the deposit. The IRS will be notified and then they will look to the address on file to mail the check.
Unfortunately, mail means a delay in your money. However, the IRS has developed a site where you can track the status of your stimulus check and update your payment information. I have heard some people have had issues with the site but, as of now, this is the only way to track your payment. As I learn more about the Coronavirus Stimulus and the ways to track your money, I’ll continue to update this article with that information. So, don’t forget to keep checking back or, even better, sign up for my newsletter so you don’t miss this or any other Coronavirus-related information!
Will I get a Coronavirus Stimulus Check if I was (or am) a stay at home parent?
Did you not work outside the home during your marriage? Again, whether you qualify for the Coronavirus Stimulus depends on your income. If your last tax return was filed jointly, the IRS will look at the total income reported by you and your spouse to determine eligibility. So, provided that the total income is within the guidelines, you and your spouse will get a Coronavirus Stimulus Check.
What if I don’t have any income outside child support? Can I still get a Coronavirus Stimulus Check?
This is where it gets tricky. If you are receiving social security or some other kind of government benefits, then the IRS will use your 1099 forms to determine your eligibility if you don’t file a tax return.
However, what if you don’t receive benefits and have no income outside of child support? If this is the case you likely do not file a tax return at all. However, it does appear that you will still be entitled to a stimulus check. However, you will need to file a simple tax return in order to claim it. However, I am not a tax professional and so, if you are concerned about your eligibility under this scenario or how to file this kind of tax return, I highly suggest that you contact one.
Will my or my co-parent’s Coronavirus Stimulus Check be considered income for child support?
As the Coronavirus Stimulus is new to all of us, it is new to the child support office as well. Therefore it is unlikely that they have had times to establish policies as to whether these monies are to be considered income for child support calculations. However, because the amount is small, I would not waste time filing to modify your child support based solely on a parent receiving a Coronavirus Stimulus Check. It isn’t going to make a difference in your child support award.
Is the Coronavirus Stimulus Check taxable?
No. The monies received from the Coronavirus Stimulus Check will not be considered taxable income for 2020.
Can my Coronavirus Stimulus Check be seized for back child support?
Yes! The same rules that apply to the garnishment of IRS tax refunds for back child support apply to the Coronavirus Stimulus Checks. In other words, if you owe back child support your Coronavirus Stimulus Check may be garnished. This also includes the Coronavirus Stimulus checks that you may receive for any of the dependent that you claim. The threshold for eligibility for garnishment is $500 owed in back support and previous identification for IRS intercept. This means that you had to already be on the list for garnishment for owing overdue child support before these checks were issued.
Worried this might happen to you? Or, are you owed back support and hope to get your co-parent’s Coronavirus Stimulus check? Didn’t get your stimulus monies and think that you should have?
You can always check with the support office that handles your case or, if available, your state’s child support online account to see if your or your co-parent’s monies were seized. Or, if you are willing to wait, you will likely receive documentation from the government or the support office indicating that the monies were taken.
Think you are out of the woods or want to prevent seizure of your monies? Remember, not all Coronavirus Stimulus checks have been sent out. This process will likely be going on until September. If you are worried about losing your Coronavirus Stimulus check, the best thing you can do is pay your child support ASAP! Your online account should show what back child support is owed and when the last payment was received.
Who will get the Coronavirus Stimulus check for our children?
The Coronavirus Stimulus package does not just include monies for the parents. It also includes a Coronavirus Stimulus check for each dependent of $500, subject to some eligibility requirements. But, Liz, who gets that money??
The party who claimed the child as a dependent will get the Coronavirus Stimulus Check for that child. This can also present a unique challenge for divorced parents.
What should I do with the children’s Coronavirus Stimulus Check if my coparent and I filed our taxes jointly?
If the last tax return filed by the parents was a joint return, then the monies for the children will likewise be given to the parents jointly. You and your coparent will then have to decide what to do with those monies. Need some ideas?
The easiest thing to do would be to split the money. However, I had a client recently suggest to her spouse that they take the money (about $1,500) and put it towards their children’s college funds. I think this is an excellent idea if you don’t need the monies right now to pay bills resulting from Coronavirus job loss.
What should I do with my children’s Coronavirus Stimulus Check if my coparent and I filed our taxes separately?
Again, the Coronavirus Stimulus check is sent to the parent who claimed the children as a dependent. If you have an even number of children it’s easy, right? You and your coparent, again subject to eligibility, will likely each get the same amount of Coronavirus Stimulus monies.
However, what do you do if you have an odd number or you and your spouse don’t get the same amount because of the eligibility requirements?
Again, there are no rules to this. So, in reality, neither you or your coparent will likely be required to share the monies with the other parent. I know, bummer.
However, if you want to ask for the monies to be split, you are certainly entitled to do so. You can also suggest that the monies be put towards something to benefit your children, like the college fund example above. Another option would be to use it for summer camp or extra-curricular expenses (whenever those are available again!).
So, what should you do about your Coronavirus Stimulus?
Nothing about the Coronavirus is easy. Usually I can give you advice based on previous decisions by the courts or what I’ve done in my private cases. However, this Coronavirus Stimulus Check is new because, well, we’ve never experienced a pandemic like this in our lifetimes. We are all navigating uncharted territory. However, I suggest that you think about the following when it comes to the Coronavirus Stimulus Check if you are divorced:
- Consider whether you should file your 2019 return ASAP in order to qualify for the Coronavirus Stimulus Check;
- Check to see what bank account you used for your last tax return and whether that account is still open so that it can receive your Coronavirus Stimulus Check;
- Keep checking back at the Divorce Lawyer Life or the IRS’ website for info on how to update your bank account information if your joint bank account is now closed;
- If your last tax return was filed jointly with your former spouse, communicate with him or her as to how you should treat the Coronavirus Stimulus monies for your children; and/or
- If you and your co-parent filed taxes separately and do not have an even number of kids, speak to him or her as to how you want to divide the Coronavirus Stimulus monies or otherwise use it for the benefit of your children.
And most importantly, keep checking back here for more Coronavirus-related divorce information. I promise I’ll keep providing it and updating the articles when I can!
What else is on the blog about Coronavirus and divorce?
Did you miss my article about how the Coronavirus is affecting property division? If so, you can check it out here.
Or, are you not sure if you are supposed to follow your custody order during this Pandemic? Spoiler alert: yes. Learn why here.
Finally, are you worried about Coronavirus job loss? Learn how this will (and won’t) affect your child support.
Want to know what’s up next on the Divorce Lawyer Life?
As the stay at home orders continue to be extended, I’ve been getting more and more questions about how these orders affect custodial arrangements. So, next week I’ll continue my look at how the Coronavirus is affecting the divorce world when I answer some frequently asked questions about how stay at home orders may (or may not) affect your child custody agreement. Don’t miss it!
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