On March 27, the President signed the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), a $2 trillion stimulus package, into law. The federal government’s response to the global coronavirus pandemic includes provisions to assist small businesses and stimulus checks for individuals. GoransonBain Ausley associate Angelica Cormier investigates useful knowledge for divorced couples regarding the aforementioned stimulus checks.
You may be wondering how the law will affect your family law case. Here is information to help answer some of your questions about the Coronavirus Aid, Relief and Economic Security Act’s stimulus checks.
Most adults should expect to receive a one-time $1,200 payment from the federal government in the next few weeks. However, some Americans will receive less. To calculate the size of the check, the government is examining the adjusted gross income listed on the taxpayer’s most recent tax return.
For those that have not filed their 2019 tax return, the government will base the calculation on the adjusted gross income listed on 2018 tax return. Under the law, individual adults will receive up to $1,200, while married couples will receive up to $2,400. Couples with children under 17 at the end of the tax year will receive $500 for each child.
Below are common questions our clients have asked regarding the stimulus package:
I have a pending divorce case, who will get the check?
The check will go to the bank account that was provided to the IRS in your previous return. If your last tax return was a joint return tax return with your spouse, please contact your attorney to discuss your options.
I have a custody case, who will get the portion of the check that is allocated for the children?
The person who filed as head of household will receive the check. If you filed jointly with your spouse and listed your minor children, or if your custody situation has changed since the tax return was filed, please contact your attorney to discuss your options.
I am the non-custodial parent and owe child support to the custodial parent, will I receive my check?
The normal rules for child support are still in effect. State child support agencies are required to report past-due child support to the United States Treasury. As a result, all or a partial amount of your check may be intercepted by the Attorney General of Texas: Child Support Division and provided to the custodial parent to be applied to the outstanding balance.
The CARES Act will provide one-time financial assistance to individuals and families, but the amount you receive will depend on the factors discussed here. If you are in the midst of a family law case now, or if you are considering divorce, you may have questions about how best to proceed at this difficult time. Don’t hesitate to contact your GoransonBain Ausley attorney, who will have the most up-to-date information and reliable counsel to help you make sound decisions.
I received my ex-spouse’s payment, what obligations do I have under the CARES Act?
The CARES Act states in relevant part:
“In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2020 an amount equal to the lesser of—[…}
(2) $1,200 ($2,400 in the case of a joint return).
The law refers to an amount given to an “individual.” Therefore, a portion of the payment you received belongs to your ex-spouse. If you have received your ex-spouse’s stimulus money, it is highly recommended that you forward the funds to your ex-spouse as soon as possible.
This amount has been provided to your ex-spouse as an individual and by keeping the money, you may face consequences for violating federal law.
For more information and updates on coronavirus (COVID-19) please visit our Family Law Advisor COVID-19 update page.
GoransonBain Ausley focuses exclusively on divorce, custody, and related family law matters. However, we are expanding the scope of our Family Law Advisor blog during the Covid-19 crisis in an effort to provide useful information to the families we serve. This blog post is part of that expanded series.
Angie is passionate about practicing family law and focuses on the areas of divorce with young children, gray divorces, and child support for adult disabled children. She is knowledgeable about the financial impact of divorce and how to help clients in difficult circumstances successfully transition into the next phase of their lives. For more information about Angelica Cormier click here.