Stimulus Payments: What Divorced Parents Need to Know

Millions of Americans will begin receiving payments from the federal government this week, funds intended to offset the economic impacts of the coronavirus pandemic. Many of our family law clients have questions, and we have some answers.

Do I need to apply for a federal stimulus payment?

You do NOT need to apply to receive benefits. Benefits are based on your federal tax returns filed for 2019, or from 2018 if you have not yet filed last year’s. Low-income workers, some veterans and others who typically don’t file tax returns are eligible for payment, and should check the IRS website for more information.

Please be aware of scam emails, phone calls, text messages, websites or direct mailings that ask you to provide detailed personal and financial information in order to “qualify” for federal stimulus funds. If you’re in doubt, check the IRS coronavirus stimulus payment website, or call us.

How and when will I get the payment?

Setting up direct deposit with the IRS is the quickest way to receive the payment; otherwise a check will be mailed, which could take a few weeks longer. You will receive a separate confirmation letter saying where your payment was sent.

Do I have to pay income taxes on it?

No, these payments are an advance on a tax credit, so they are not taxed as income.

How much do eligible adults get?

Most adults earning up to $75,000 per year in adjusted gross income are eligible to receive $1,200; those who earn more, up to $99,000, will receive reduced benefits. Taxpayers filing as head of household who earn up to $112,500 will receive full payment. If someone has claimed you as a dependent on their tax return, even if you are an adult, you will not receive a payment. Here’s how to calculate your payment.

What if I got divorced recently?

If you and your spouse filed jointly as a married couple in 2018 but are now separated or divorced and you plan to file separately, it is best to file your tax return as soon as possible, even though the tax filing deadline has been extended to July 15.

Are there payments for minor children?

Yes, $500 for each eligible child under the age of 17.

Which co-parent will receive it?

Benefits are based upon the 2019 tax returns, so whichever parent claimed the child as a dependent on taxes last year will receive the payment. The IRS will refer to your 2018 return if you have not yet filed for 2019. Again, it may be worthwhile to file your federal tax return soon, particularly if your income or child dependency situation has changed from the previous year.

What if my former spouse is behind on child support?

Parents who are behind on child support either will not get a federal stimulus check or will receive a reduced payment; the Treasury Department will send those funds to the custodial parent to help make up what is owed.

What about dependent adult kids?

At this time, if a child is over the age of 16 but dependent on someone else, the child is not eligible for a payment as an adult, and the parent is not eligible for a $500 child payment even if they are fully financially responsible for the adult child.

Are SSI recipients eligible?

Yes, those receiving Social Security disability or retirement income qualify for full payment, and do not need to file a tax return.

There are numerous exceptions and loopholes in the CARES Act. Some may be addressed in a future stimulus package. Here are some of the most common:

  • College students generally do not qualify for benefits at this time unless they were earning enough wages to qualify and filed a tax return for 2018 and/or 2019.
  • Currently, there is no provision for payment if your adjusted gross income for 2019 was over $99,000, but you have since lost your job and expect to earn less in 2020.
  • Those who do not have a valid Social Security number are not eligible.

For more information, visit the website.

With a combined 30 years in family law, the attorneys at Jones Family Law Group, LLC, will provide the legal guidance you need. For questions or to schedule a confidential consultation, contact our team.