Although divorce can be riddled with emotion, it is also important to recognize that it is a major financial transaction that can affect you for years or even decades to come. Sure, property division and spousal support play an important role, but there may be other issues that are seemingly minor until they aren’t. The stimulus payments that have been issued over the course of the last year serve as a perfect example.
Stimulus check distribution
Stimulus payments have been issued on an individual basis, unless parties are married and have filed their taxes jointly. In those instances, most stimulus payments have occurred via direct deposit into the bank account that was identified when taxes were filed. In some instances, the IRS issued paper checks or debit cards to the individual who filed the joint return. Where the confusion comes in is when stimulus payments have been issued based on 2019 tax returns and you have since gotten divorced from your spouse. Things can be complicated even further if you have children.
Who gets the stimulus checks?
The law in this area isn’t very clear. However, lump payments made based on a joint filing are intended to benefit both individuals who are identified on the jointly filed tax return. Therefore, if your former spouse is withholding your portion of the stimulus payment even after trying to negotiate a fair resolution, then you may want to discuss the matter with your family law attorney, as additional legal action may be warranted.
When it comes to stimulus payments for your children, it is important to recognize that these stimulus payments are not considered income. Instead, they are considered a tax refund. Your divorce decree should have specified who is allowed to claim children on their tax returns and therefore recoup any refunds in that year. Your decree might also specify how returns from previous tax years are to be handled.
If you are in the midst of a divorce, then you might want to negotiation or litigate over these stimulus payments as if they are like any other piece of marital property.
What about child support arrearage?
If there is a child support arrearage, then the individual who is in arrears may not see any of the money that he or she was expecting though the stimulus program. This is because these payments can be garnished to help settle arrearages. If you’re dealing with this issue, then you may want to speak with a legal professional to ensure that stimulus money is flowing in the right direction.
What are your next steps?
If you are concerned about where stimulus money is going or potentially going, then you need to be proactive to protect your interests. In many cases, this might mean simply reaching out to your former spouse to see if you can come to a resolution that is mutually acceptable. In other situations, it may mean addressing the matter in court. If you are on the front end of your marriage dissolution process, then this issue highlights the importance of being diligent and carefully addressing every issue that could have implications for your future.
Fortunately, you don’t have to face these issues on your own. Skilled legal professionals can help guide you through every aspect of your divorce as you strive to achieve the outcomes you desire.