Child Support and the Coronavirus Relief Package (CARE Act) - Dennis B. Dahlberg

The $2.2 trillion coronavirus relief package, enacted and signed on Friday, March 27, 2020, would see payments, either by direct deposit or actual check, go to millions of Americans.  The one-time payments include $1,200 per adult, $2,400 per couple, and $500 per child.   Individuals making $75,000 or less qualify to receive a check, or $150,000 per couple.

However, these stimulus payments involving children, could complicate child support matters.  According to recent statements by Senator Chuck Grassley (Iowa), people who have a child support arrearage – overdue on their child support payments – may not receive a payment from the federal government.

While the coronavirus relief bill that was passed by the House, Senate and signed by President Trump on Friday, "turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments," those who are behind in their child support either might not qualify or see the amount of their check significantly reduced, Grassley said.

Grassley further stated, "The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the treasury department."  Thus, if a person is typically having his or her federal tax returns garnished due to a child support debt, it is unlikely, according to these statements by Grassley, that he or she would receive the payment.

Another complication arises as to which parent gets to receive the child stimulus payment if the parents alternate the years in which they claim their children for tax filing purposes.  In a perfect world, the parents would either split the payment, or make the decision to give it to the parent that needs it more, perhaps based upon current employment status.  However, we live in a far less perfect society.

From a technical standpoint, it would appear, that the child stimulus payment is an advanced credit for the 2020 tax year.  Thus, the parent who would be claiming the children for the 2020 tax year would be the one entitled to the stimulus payment.  However, the perceived intent is complicated by the fact that the federal government is sending the payments based upon returns filed for 2018, if the 2019 tax return has not yet been filed as the federal government and many states have delayed the filing of 2019 taxes.  Thus, the parent that claimed the children for 2019 or 2018 will be the parent to whom the payment is sent.

Parents should consider, and might want to be encouraged, to split the money in whatever way makes most sense for them (who is out of work because of the pandemic, divide proportionate to income, etc.).

We would appreciate the opportunity to discuss your child support or custody needs with you, and we stand ready to assist you in your current and future needs.  Please feel free to contact one of our attorneys for a free consultation at 614-670-8103, or visit us at www.dsflawfirm.com.

- Dennis B. Dahlberg