CORONAVIRUS RELIEF STIMULUS CHECKS AND UTAH DIVORCES

Many Utah family law attorney’s offices are receiving calls from recent divorce clients asking who is entitled to the “economic impact payments” or relief stimulus checks.  The problem is created because the amounts of the relief stimulus checks are based on the eligible taxpayers most recent tax filing, and many taxpayers have not filed their 2019 taxes yet because of the tax filing deadline extension to July 15, 2020 due to COVID-19.  In this case, the amount of the stimulus check would be based on 2018 taxes.  And, for recently divorced parties, this question was not addressed in their Divorce Decrees.

To avoid court action over the question of who is entitled to the stimulus check, which is a marital property/asset, BEST PRACTICE is to equally divide the check with the other divorced party immediately upon receiving the check.  Otherwise, the benefits of the stimulus check could be eaten up in attorney fees and court costs.

Other frequently asked questions and answers:

Who is eligible for the stimulus checks in the first place?

• Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
• Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive a stimulus check of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
• For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
• Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

When should I expect to receive the stimulus check?

• The Treasury Department and the IRS announced on March 30, 2020 that the distribution of stimulus checks will begin in the next 3 weeks.

What do I need to do to receive the stimulus check?

• If you filed a tax return for 2018 or 2019, you do not need to do anything. The IRS will calculate and auto-deposit your check in the bank account reflected on your most recent return.
• If IRS does not have your direct deposit information, in the coming weeks Treasury is going to develop a web-based portal for taxpayers to provide their bank account information to the IRS.
• If you do not typically have to file tax returns (e.g., low-income, Social Security recipients, etc.), you must file a simple tax return first to receive a stimulus check.

Best advice for divorced people receiving stimulus checks based on married filing jointly tax returns

Because as of less than 2 months ago the stimulus check issue did not exist, it has not been addressed in most divorces finalized before that point.  I am currently advising my current and past clients who are dealing with receiving a single check because their last tax returned on file with the IRS was filed as married filing jointly is to go ahead and split the check in half with the ex-spouse.  There are many valid reasons for trying to offset the quantity of funds that you and your spouse get, for example, owed child support or alimony. However, it is not worth ending up in court to litigate the differences and tying most if not all your stimulus check (sometimes more than) with attorney fees.

What should I do if my ex-spouse refuses to give me my portion of the stimulus check?

If you find yourself arguing with your ex-spouse and not receiving any portion of the stimulus checks you can talk to an attorney to help you through the process.  There are various court actions that can be brought to try and force your ex-spouse to give you your portion of the funds.  The ex-spouse might even be sanctioned by the court and made to pay for your attorney fees.  There is a good chance that a lot of the stimulus check amount would be eaten up in attorney fees so it is recommended that both parties do their best to be fair and equitable.

If you are having difficulty figuring out what to do with your tax return and this stimulus check please give Hoyer Law a call and set up a consultation.  We can help you!