Recently Divorced Couples:
For couples who were married at the time they filed their last tax return but have since divorced, this may create a situation where the stimulus money is being deposited into an account which is now owned solely by one party or the other. The IRS will attempt to disburse stimulus payments electronically to the bank account on file with the IRS. If no bank account is on file with the IRS, the IRS will mail the stimulus payment to the address last reported, either on the 2018 or 2019 return. As such, it is possible that the return will be made to a bank account that you no longer have access to or mailed to an address where you no longer live but your spouse does.
If you filed “jointly” with your spouse for the 2018 tax year, but have separated from your spouse since filing, then it is best to file your 2019 taxes as soon as possible. You will need to notify the IRS of your updated status of “separated” or “single”.
It is not likely that the IRS will have updated information for couples who have separated since their 2019 tax filing. Couples who filed jointly for the 2019 tax year but separated after filing, may need to coordinate division of the stimulus funds. If you cannot coordinate with your spouse, then seek a court order to divide the funds appropriately. The IRS will be sending a paper notice in the mail detailing information about where your payment ended up and in what form it was made.
If you are currently divorcing, the stimulus payment is a form of marital property. If your spouse is unwilling to utilize the funds in a manner that you agree to, or, will not share the payment with you, you should speak to an attorney about how this money could be recovered later in the divorce or addressed in your Separation Agreement.
If you are already divorced, consider contacting your ex-spouse about equally sharing the payment. Technically, the Act provides that in cases where a payment is made with respect to a joint return, half of the credit “shall be treated as having been made or allowed to each individual filing such return.” Our interpretation of this is that the payment should be split or shared between the joint filing parties.
If you have been divorced long enough that your last returns were not filed jointly, you will receive your own portion of the stimulus directly.
How Are The Payments For Children Allocated To Co-Parents?
For each qualifying child age 16 or under, there will be an additional payment of $500. The stimulus payments are based upon the 2019 tax filing. This means that if you claimed your child on your taxes in 2019, then you are likely to receive the $500 benefit for each child that you claimed as a dependent. If you have not filed taxes for 2019, then you should refer to your 2018 tax return.
Please contact us directly either by phone or online so that we may help you address your individual needs and concerns. These are confusing times. We are here to help.