The IRS’s Economic Impact Payment Information Center contains a lot of helpful information and is well worth reading. Plus, the IRS’s website has an online tool for checking the status of your payment, how your payment will be made (check or direct deposit), and to submit bank information if not on record.
While not intended as tax advice or substituting for the advice of an accountant or tax attorney (which I am not), here are Frequently Asked Questions about how stimulus payments (or as the IRS calls them “economic impact payments”) may be impacted by family legal & divorce matters.
1. My last tax return was filed jointly with my spouse but we have since separated, who will get the payment?
Answer: Per the IRS, if your last filed tax return was joint, the payment will be joint and go to the last address or bank account on record with the IRS. To receive separate payments, you must have filed a separate tax return from your spouse. For example, if you jointly filed taxes for 2018, have not yet filed for 2019, and now have separated from your spouse, consult with a tax advisor for the cost/benefit of filing a separate 2019 return to attempt to separate the payments and about filing separately and later amending to joint. Please also see FAQ #3 about separate spouse payments when a stimulus payment is intercepted to collect child support arrears.
2. Will I get a stimulus payment if I owe back child support/child support arrears?
Answer: No. Per the IRS, the only reason a stimulus payment can be withheld is for back child support or child support arrears. If withheld, your stimulus payment will be applied to child support owed. See also FAQ #3.
3. Will I get a stimulus payment if I filed a joint return with my current spouse who owes back child support/child support arrears?
Answer: No, except if you filed an Injured Spouse Claim together with your last joint income tax return. An Injured Spouse Claim is filed when a spouse over withholds/overpays taxes, is due a refund, files a joint tax return, but the other spouse owes child support (which would result in the refund being intercepted and applied to child support arrears), to ask that the overpaying spouse receive his/her share of the refund. If you filed an Injured Spouse Claim, the stimulus payments are supposed to be split and you will receive your share while your spouse’s will go to back child support.
4. Who will receive the stimulus payment for our child, when my ex and I alternate/take turns claiming our child on our individual tax returns?
Answer: Per the IRS, the parent who last claimed the child is entitled to the child’s stimulus payment. But when both parents’ latest returns filed are for different tax years and both have claimed their child, the IRS has yet to say and the proof is likely to be in what the IRS does (and whether both parents receive a payment for one child).
5. What if my ex received my share of the stimulus payment (either for myself or our child)?
Answer: A tough question because the answer is dissatisfying. If your ex receives your share and will not turn it over, there’s not a cost effective way to force its return to you. The economic benefit is reduced by the time and cost of chasing your ex and involving attorneys and/or the court.
5. Is the stimulus payment considered income when calculating child support or alimony?
Answer: Per the IRS, the payment is not income and not taxable. Despite past stimulus payments in 2008 and 2009, Maryland law (whether statutory or Appellate case law) does not specifically say. From a practical perspective, the amount is unlikely to make a significant difference in the calculation of child support or alimony.
Income is broadly defined as “income from any source” for child support purposes and includes certain “benefits” (Social Security, worker’s compensation, unemployment insurance, disability insurance, and third party dependent benefits paid on behalf of a child support payor). However, it excludes benefits from means-tested public assistance programs. Income for alimony purposes is considered much the same (though without a statutory definition).
So, a definite answer is not possible. It seems unlikely because the law does not specifically define it as income and the IRS says it is not. And, while it nets out for separated spouses and parents who both receive a payment, not everyone is entitled to receive a payment. Curious if a court might consider as income any amount wrongfully kept by the other parent or ex-spouse, which is discussed in FAQ #5.
Since 2002, Lindsay Parvis has represented clients in Maryland custody, divorce, and marital matters. She negotiates, litigates, and advocates for the best interests of her clients, whether in contested litigation, uncontested settlement, or premarital and other agreements. Her clients are not only spouses and parents, but also children whose interests she is appointed by the court to represent in contested custody litigation. Lindsay strives to improve Maryland law in the General Assembly, volunteering her time to monitor, advocate, and educate about legislative developments in family law.