Man holding his stimulus check.

Does My Stimulus Check Count as Income and Do I Need to Give a Portion of it to Child Support?

COVID-19 has unquestionably changed the world for everyone, including divorced parents. Whether you have recently divorced or have long ago settled into the somewhat unsettling routine of child custody, child support, and parenting time, the pandemic may have already affected you financially. The recent Coronavirus Aid, Relief, and Economic Security (CARES Act) has been created to give those harmed the most some measure of financial relief, but how will it affect you?

You may have lost your job or are working remotely. You and your ex no doubt have to rethink childcare arrangements since many daycare facilities and schools are now closed. Now that you may be getting a stimulus check from the federal government, you are wondering how your divorce status will affect your potential benefit. Will you have to pay a portion of it in child support? This is a good time to get in touch with Orlando Family Team where our knowledgeable attorneys can provide you with information and support.

What Stimulus Checks Are Designed to Accomplish

In view of the fact that so many Americans are experiencing severe financial (not to mention physical and emotional) pain during the pandemic, a $2 trillion economic stimulus package has been legislated by the federal government. 

What Stimulus Checks Pay

The plan is to send $1,200 to each single adult who reported a gross income of under $75,000 for 2019. Single parents designated heads of households will receive $1200 if their income does not exceed $112,500. Married couples who filed jointly will receive $2,400 if their combined income is under $150,000. Payments diminish if individuals or couples exceed the income limit, their stimulus check decreased by $5 for every $100 above the limit. Each payment, however, has a cap on income above which no stimulus will be given. 

But what about those who are divorced? When parents are divorced, whichever parent claims the child as a dependent will receive an additional $500 for each child under 17.

If You Are Already Divorced

Because most divorce decrees include stipulations that joint tax refunds will be recognized as an asset to be equitably distributed, it seems fair that if you filed a joint tax return, a stimulus check based on your family’s pre-divorce status would be divided 50/50. But what happens if the check is automatically deposited in your ex’s bank account? While many ex-spouses will share the amount received, some will not. Then the question for the excluded spouse will be: Is it worth the monetary cost and emotional turbulence to engage in a legal battle to obtain my share of the stimulus check? Your trusted divorce attorney will be able to help you answer this question in your particular case.

If You’re Not Yet Divorced

If you’re in the process of negotiating your divorce, your attorney will make sure the handling of the stimulus payment is addressed as part of your final agreement. It should be noted that rumors stating that your stimulus will have to be returned next year by forfeiting your tax refund are completely false. Stimulus checks will not be taxed, now or in the future.

How do stimulus checks affect child support payments?

While the CARES Act suspends certain debts, including overdue student loans or back taxes — which, under ordinary circumstances could have led to garnished wages or tax refunds — delinquent child support payments are in a completely different category. 

Because the federal government always makes child support a priority, stimulus checks may be seized to pay back child support. As a matter of fact, child support is the only obligation that subjects stimulus payments to the Treasury Offset Program (TOP). Even if you are experiencing financial hardship, no exceptions to this provision will be made. The process, however, is cumbersome and results in delays: the amount reduced or withheld for owed child support will go back to the state, and only then will a new check be issued to the parent who is owed child support. 

The Takeaway

If you owe back child support and expect to receive a stimulus payment, you should be aware that your debt will offset that check for the amount you owe. In other words, depending on how much child support you owe, you will either not receive a stimulus check at all, or you will receive a check for a lower amount. If you feel that you don’t owe the back child support that has been reported, or if your ex refuses to pay you your half of a couple’s stimulus check, you should contact Orlando Family Team for clarification and legal guidance.