Issues to Consider During COVID-19
The new Coronavirus stimulus package, which was recently signed by the President, aims to help those individuals affected by the economic challenges brought on by the pandemic.
The stimulus checks will be based on the way you filed your taxes (individually or jointly) and your income. The issues surrounding this topic are complicated and you might need to consult your accountant, but here are a few important things to keep in mind.
What do I need to know if I’m already divorced?
Usually, as part of any divorce process, tax refunds are recognized as an asset that is subject to distribution and refunds are generally split evenly between parties. If you filed jointly, ideally, the party receiving the stimulus check should forward 50% to their ex-spouse. If they refuse to split the check, the other spouse has the right to legally contest the distribution of the funds. However, this might not be worth the cost to litigate.
What do I do if I’m not divorced yet?
If you are currently negotiating the terms of your divorce, make sure the stimulus payments are something you are addressing as part of your divorce proceedings. Keep in mind, however, that the stimulus funds are actually an advance on credits you will be able to receive on your 2020 tax returns.
Which parent gets the $500 payment for kids?
As part of the stimulus package, parents will get an additional $500 payment per child under the age of 17. Tax exemptions for children will be allocated via marital settlement agreements and the parent who claimed the child that year would likely be the one to receive the stimulus check.
Once again, parents can consult an attorney to argue how these funds should be allocated, but it may not be worth the price of litigation.
Can I garnish my ex’s stimulus check for unpaid support?
The IRS will probably not be garnishing rebates for stimulus payments based on information we have at this time due to the government’s strong initiative to get money out to the public during this pandemic.
Should I file my taxes early?