Economic Impact Payments
During these difficult and uncertain times, we know that finances are one of many major concerns. You may have heard in the news, information regarding “stimulus checks” issued by the Internal Revenue Service (IRS) for economic impact payments as a result of the COVID-19 pandemic and have questions about how much you can expect to receive, where this money went, and what to do with this money during a divorce.
How Much You Can Expect to Receive
The economic impact payments are based upon tax returns filed for the calendar year 2019 and the circumstances that existed at that time. For those who have not yet filed their 2019 returns, the payments are based upon 2018 tax returns and circumstances. Depending on your household income, your marital status, and the number of children you claimed on your 2018/2019 return, the amount you receive will vary. Generally speaking, eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Where This Money Went
Although there have been delays in the distribution of these funds from the IRS, most of these economic impact payments have been or will be paid directly based upon your banking information provided with your returns. If you have already filed your 2019 returns, the IRS will use that information to calculate the payment amount and deposit the economic impact payment directly into the same banking account reflected on the filed return. If no 2019 returns have been filed, the IRS will rely on 2018 tax filing information.
This may present a special challenge for couples going through a divorce, as you or your spouse may no longer have access to the bank account in which the payments were deposited.
Who Gets This Money During a Divorce
If you and your spouse filed joint tax returns in 2018 or 2019, and you or your spouse has received the economic impact payment but are uncertain how to handle these funds, these funds may be community property that should be divided equally between you and your spouse. These funds may also be helpful during this time when it comes to child or spousal support obligations. If you
have received the economic impact payment, or you are aware that your spouse has received it, and are uncertain how to handle these funds, you should speak with your attorney about how to best approach the allocation and division of this money.
For more information and guidelines from the IRS about these economic impact payments, please visit www.irs.gov/coronavirus-tax-relief-andeconomic-impact-payments