Is the COVID-19 Relief Stimulus Considered Marital Property?

 Posted on April 05, 2021 in Property Division

The recent passing of the American Rescue Plan Act, including another round of COVID-19 economic impact stimulus payments, has been welcome news for many families who have struggled financially throughout the pandemic. However, if you have been through a divorce in the past year, especially if you have filed taxes jointly with your former spouse, obtaining your share of the stimulus may be more difficult than expected. Understanding your eligibility for the stimulus, as well as how it is distributed, can help you ensure that you receive the funds to which you are entitled.

Who is Eligible for the 2021 Stimulus Payments?

The most recent round of stimulus payments provides up to $1,400 for each U.S. citizen or lawful resident who qualifies based on their adjusted gross income. Individuals qualify for the full amount if their annual income is $75,000 or below, or $112,500 or below if they file as head of household. Married couples who file taxes jointly qualify for $2,800 ($1,400 per spouse) if their adjusted gross income is $150,000 or below. Eligible individuals and couples will also receive $1,400 for each qualified dependent. Individuals and married couples with annual incomes above these thresholds may qualify for reduced stimulus payments, though payments phase out completely at an individual income of $80,000, a head of household income of $120,000, and a married couple income of $160,000.

How Are Stimulus Payments Disbursed to Divorced Couples?

Most stimulus payments for this round are distributed using information provided when filing either a 2019 or 2020 tax return. If you are recently divorced and you filed your taxes individually for both of these years, your stimulus payment should be sent to you, likely as either a direct deposit to your bank account or a check sent in the mail. However, if you filed taxes jointly with your former spouse in 2019 and/or 2020, it is possible that the full amount of the stimulus will be delivered to the spouse who still has access to the bank account that is set up for direct deposit, or who still lives at the address on file with the IRS.

The majority of these payments have already been distributed, and the rest should be delivered in the coming weeks. If you have not received a payment and you know you are eligible, now would be a good time to check with your former spouse to see if they have received your share. If you have children or other dependents, it will also be important to ensure that the additional stimulus payments go to the spouse who is able to claim them for tax purposes according to the divorce resolution.

Contact a DuPage County Divorce Attorney

You may be able to work out a solution with your former spouse to get your stimulus payment, but if you encounter any difficulties or you have any questions regarding how the payment should be distributed, our Wheaton family law attorneys at Davi Law Group can help. Contact us today for a free consultation by calling 630-657-5052.

Sources:

https://www.irs.gov/coronavirus/third-economic-impact-payment

https://www.irs.gov/newsroom/irs-projects-stimulus-payments-to-non-filer-social-security-and-other-federal-beneficiaries-will-be-disbursed-later-this-week