If You Owe Child Support, You May Not Get a Stimulus Check

When the coronavirus (COVID-19) made its way to the United States, American’s lives were changed forever. It doesn’t matter who you are or where you live in the U.S., your life was affected. Even if you didn’t lose your job or business because of COVID-19, you were probably asked to stay home as much as possible.

We can almost guarantee that you were directed to wear a facemask when in public, you were expected to wash your hands frequently, and maintain “social distancing,” which is at least six feet away from people not living in your household. In the middle of March, President Donald Trump declared a national emergency because of COVID-19. Within days of the declaration, it’s almost as if the country just shut down.

While “essential businesses” remained in operation, schools shut down, non-essential businesses closed their doors, movie theatres closed, concerts were canceled, and life as we know it came to a grinding halt. As a result of the pandemic, millions of Americans lost their jobs. So, to help remedy the situation and inject a little cash back into a hurting economy, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law by President Trump on March 27, 2020.

Financial Assistance for Americans

“The CARES Act provides for Economic Impact Payments to American households of up to $1,200 per adult for individuals whose income was less than $99,000 ( or $198,000 for joint filers) and $500 per child under 17 years old – or up to $3,400 for a family of four,” according to the U.S. Department of The Treasury’s website.

In addition to the above, the IRS is using information obtained from the Form SSA-1099 and Form RRB-1099 to issue $1,200 stimulus payments to people receiving Social Security who did not file 2018 or 2019 tax returns. These individuals will receive their payments in the form of direct deposit or paper check; the same way they receive their normal Social Security benefits.

Is Everyone Eligible for Stimulus Payments?

Not everyone is eligible for economic stimulus payments. While most Americans will be entitled to economic stimulus payments, those who owe child support arrears may find that their payments are reduced or eliminated altogether.

“The economic impact payments can be offset through the Treasury Offset Program (TOP) only to collect delinquent child support obligations that have been referred by the state to TOP,” according to the Bureau of Fiscal Service.

If you owe child support, you may be wondering how much will be taken out of your check. It depends. If you owe less than the $1,200 payment, what you owe should be deducted from your stimulus payment, and you should receive the remaining amount. However, if you owe $1,200 or more in child support, your entire stimulus payment should go toward your child support arrears.

“What if I don’t owe child support but my spouse does? Can our entire $2,400 check be taken and given to my spouse’s ex for child support arrears?” If your spouse owes child support and you filed your taxes jointly, your portion of the stimulus payment can go directly to your spouse’s ex to catch up on child support arrears.

If you don’t want to kiss your stimulus payment goodbye, you’d have to file an injured spouse form with the IRS. To file an injured spouse claim, go to this page on the IRS’s website.

What About Financial Hardship?

Let’s say the reason why you’re behind on child support payments is that you lost your job as a direct result of COVID-19. In that case, can an exception be made? After all, you could really use the $1,200 to pay your living expenses. No, an exception will not be made, even if you’re unemployed because of the coronavirus.

The CARES Act did not let any of the states have discretion when it came to reducing or eliminating offsets because of noncustodial parents experiencing hardship. Parents who owe child support aren’t the only ones who may not be receiving an economic stimulus check. The following individuals will not qualify for stimulus payments:

  • Taxpayers who are married and file jointly and earn $198,000 (gross) each year
  • Head of household taxpayers who earn $136,500 (gross) or more
  • Eligible individuals who earn $99,000 annually (gross) or more
  • Nonresident aliens
  • People who are incarcerated in jail or prison
  • Deceased individuals
  • Estates and trusts
  • College students who are claimed as dependents on their parents’ tax returns

“What about U.S. citizens living abroad? Can they receive an economic stimulus payment?” Yes, they can. If you’re living outside the United States and you’re eligible to file a Form 1040 or Form 1040-SR, and you have a valid Social Security number, and you can’t be claimed as a dependent on someone else’s taxes, then you are eligible for an economic stimulus payment (assuming you don’t owe child support). If you’re a non-resident alien and you file a Form 1040-NR or Form 1040-NR-EZ, unfortunately, you are not eligible for a payment.

Note: The IRS is not going to call, text, or email you about your economic stimulus payment. It won’t contact you and ask for your personal or bank account information. If a website or someone on a social media account tries to contact you and request money or personal information, such as your Social Security or bank account number, it’s a scam. Go to IRS.gov, the IRS’s official website, and read the section on coronavirus-related scams.

If you need legal assistance with a child support matter, including a downward modification due to COVID-19, contact Cairns Law Offices today!