If the stimulus check is based on 2018 taxes and my custody arrangement significantly has changed, do I get to keep the money?
I do not practice law in your state. Therefore, I cannot inform you as to the specific laws of your state, but I can provide you with general tips for this sort of issue.
The stimulus payments have been somewhat of a hot-button topic, as we navigate our way through the COVID-19 pandemic. Many parents have been confused as to who is entitled to any stimulus payouts and, if so, how much. Given these payments are made automatically based on previously filed tax returns, that makes this issue all the more confusing and, sometimes, unfair.
Many times, state courts likely will be reluctant to address this issue, given the stimulus checks and tax exemptions in general are based in federal laws. However, most courts in my state will enforce agreements made by parents. I have seen this particular issue come up in many cases in my area. I would like to say there is a bright-line rule that makes sense to everyone, but unfortunately, there is not.
There are several different scenarios that I’ve seen the court consider to address stimulus payouts given these payouts do not have precedent. One solution I have seen is having the parties split the stimulus payout pro-rata in accordance with their incomes. Another solution I have seen is the court dictating who receives the children’s portion of the stimulus payout based upon who claims the exemptions. I also have seen the parties simply split the returns equally.
In a situation where the parties are alternating who claims the children as tax exemptions each year, it seemingly would make the most logical sense to split the stimulus payout equally for the portion pertaining to the child or children. This can create a precarious situation if certain situations are present: the parties haven’t filed a 2019 return yet or they have filed a 2019 return, but the parent entitled to the exemption in 2020 is not receiving the stimulus funds because the payouts are based upon the previous year’s filings.
The best solution to addressing any problem one might encounter in this situation is to seek relief through the courts. As it is with any situation where someone may not be in compliance with a court order or any other contested custodial or support issue, the only way to force compliance is to have an order that requires compliance.
How judges will handle these types of matters likely will vary from state to state and from county to county within the state, so the best course of action would be to consult with an attorney in your area for the most accurate tips and strategies on how best to proceed.
Dan Pearce is an Online Editor for Lexicon, focusing on subjects related to the legal services of customers, Cordell & Cordell and Cordell Planning Partners. He has written countless pieces on MensDivorce.com, detailing the plight of men and fathers going through the divorce experience, as well as the issues seniors and their families experience throughout the estate planning journey on ElderCareLaw.com. Mr. Pearce has managed websites and helped create content, such as the Men’s Divorce Newsletter and the YouTube series, “Men’s Divorce Countdown.” He also has been a contributor on both the Men’s Divorce Podcast and ElderTalk with TuckerAllen.
Mr. Pearce assisted in fostering a Cordell Planning Partners practice area specific for Veterans, as they deal with the intricacies of their benefits while planning for the future. He also helped create the Cordell Planning Partners Resource Guide and the Cordell Planning Partners Guide to Alternative Residence Options, specific for seniors with questions regarding their needs and living arrangements.