To provide American families relief during the economic downturn caused by the coronavirus pandemic, the CARES Act provides for Economic Impact Payments to American households of up to $1,200 per adult for individuals whose income (according to their last tax return) was less than $99,000 (or $198,000 for joint filers) and $500 per child under 17 years old. The 2020 CARES Act will put cash in the hands of individuals and families beginning this week.
Some divorced couples and parents who share child custody are wondering who gets this money. What happens if you share custody of your child or children with an ex-partner? What if you last filed taxes as a married couple but are currently involved in divorce litigation?
Generally speaking, the parent who claimed the child on his/her 2018 or 2019 tax return (whichever was most recently filed) will receive the $500 stimulus payment allotted to the child. However, if that parent is currently in arrears in child support, he/she should not qualify for an economic stimulus payment. See the IRS website for more information.
Those who are currently involved in litigation should ask that the court reapportion child support credit and/or marital assets and debts in order to reflect that a fair and equitable division of stimulus funds is made. This would be done by the courts on a case by case basis as every family’s circumstances are unique.
It is unlikely that the courts will entertain new litigation to balance stimulus payments between parties if that is the only issue.
To schedule a consult, contact the family law attorneys at Joseph, Hollander & Craft.