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The Check – Who Gets Them and How Much do I Get if I’m Eligible?

U.S. citizens who filed taxes will receive a check for $1,200.00. Those who filed taxes jointly will receive a check for $2,400.00. Parents will receive an additional $500.00 per qualifying dependent 16 years old or younger. A qualified dependent is an unemancipated child who resides with you for over half of the year. However, not every individual will receive this amount, and some will not receive anything at all. Individuals who reported an Adjusted Gross Income (AGI) of less than $75,000 will receive the $1,200.00 in full. Individuals who filed as head of household and reported an AGI of less than $112,500.00 will receive their $1,200.00 in full. Those who filed taxes jointly and who reported a combined AGI of less than $150,000.00 will receive payment in full.

The phase out threshold will begin at $75,000.00 AGI for individuals, $112,500 AGI for those who filed as head of household and $150,000.00 combined AGI for joint filers. The phase out will be at the rate of $5.00 for every $100.00 earned over the applicable threshold. This means that individuals who reported an AGI of $99,000.00 or over will be completely phased out of receiving any funds and joint filers will be completely phased out if they reported an AGI of $198,000.00 or over.

Individuals who have child support arrearages have their tax refunds garnished and applied to the arrearage by the state in which the support is owed. Similarly, individuals who are back on child support will likely have their stimulus check garnished by state in which the arrearage is owed. This will vary state by state depending on whether the state government in which the arrearage is owed moves forward with these garnishments.

What if I Haven’t Filed My 2019 Taxes yet?

The IRS will use 2018 tax filing information for those who have not filed their 2019 taxes. Therefore, those who have seen an increase in their income between 2018 and 2019 should wait to file their 2019 taxes until after they have received their stimulus check. Individuals who have not filed taxes in 2018 or 2019 should do so immediately in order to expedite receiving their stimulus funds.  The tax filing deadline for 2019 has been extended to July 15, 2020.

How Will I Receive the Check and When?

Individuals who received a tax return by direct deposit within the last two years will have their check directly deposited into the bank account they have on file with the IRS. Individuals who do not have a bank account on file with the IRS will have their check mailed to their last known address. The IRS has the goal of dispersing direct deposits within three weeks. For those receiving their checks by mail it could take up to four months.

Things to Consider if you have a Dissolution

Those who have a pending dissolution or parentage case should immediately contact their attorney. Individuals whose spouse received their most recent joint tax refund via direct deposit will receive both parties’ stimulus checks via direct deposit. It is common for parties to split the tax refund received from their last joint tax filing as part of the final settlement or court order dividing the marital estate. Similarly, the CARES Act stimulus checks must be considered and the distribution of same must be negotiated as part of a litigant’s pending dissolution.

Those individuals who have recently had their dissolution finalized and who filed jointly with their ex-spouse on their last tax return must consider how their last joint refund was received. Individuals who received the joint refund in their own account should consider dispersing their ex-spouse’s stimulus check to that individual to avoid litigation on the matter.

If an individual has not filed a tax return since filing jointly with their spouse and their last joint tax refund was deposited into their ex-spouse’s bank account, there is a risk that their ex-spouse will dissipate or spend their stimulus check. For that reason, an individual in this situation should immediately contact their ex-spouse in writing to document their request to receive the funds from their ex-spouse. If an individual’s ex-spouse is unresponsive or refuses to distribute the funds, they should immediately contact their attorney.

A Final Judgment for Dissolution will address which parent claims the dependency exemptions for children at issue in the matter. Similarly, a court order related to child support in parentage cases will also address which parent claims the dependency exemptions. These exemptions are often alternated between the parties even if one parent does not have the minor children in their care for half of the year or more. An IRS Form 8332 is filled out by a custodial parent to release their right to claim a child as a dependent to the non-custodial parent. The IRS will distribute the $500.00 stimulus funds for minor children to the parent who claimed the child or children on their most recent tax return. Individuals who did not claim their children as dependents on their last tax filing should immediately reach out to the other parent in their case in writing, to negotiate the allocation of those stimulus funds related to the minor children.