In early 2021, many Americans can expect to receive stimulus payments for themselves and dependents through a new $900 billion federal economic relief package. The payments are intended to provide a bit of relief to many who have been impacted by the ongoing coronavirus pandemic. Here’s how these stimulus payments differ from those distributed beginning in April 2020–and what divorced parents with dependent children need to know.
Benefit amounts have changed.
Qualifying adult recipients will receive $600 payments this time, half of the previous amount. Each dependent child, however, will qualify for payments of $600 rather than $500.
Income and age qualifications apply for adults and dependents.
As before, stimulus benefits are based on an adjusted gross income of $75,000 or less based on federal tax returns filed for 2019. People who earn between $75,000 and $100,000 will receive a reduced, income-adjusted payment. Recipients cannot be claimed as a dependent on anyone else’s tax return. Social security recipients will not need to file tax returns to receive the stimulus payment.
The earlier CARES Act defined dependent children as age 16 or under, and the new federal stimulus package is likely to use the same guidelines. Unfortunately, this leaves out anyone age 17 or over who is still claimed as a dependent on a parent’s tax return.
Only one divorced co-parent will receive a payment for dependents, unless…
Whichever parent claimed a child under 17 as a dependent on their tax return for 2019 will receive a relief payment for the child. However, if that parent owes back child support, the Treasury Department will direct those funds to the custodial parent to help make up what is owed.
Federal stimulus payments are not taxable and will not reduce tax refunds for 2020.
This differs from federal unemployment benefits. Unemployment payments are taxable. One-time stimulus relief is not.
Direct deposit is quickest and safest.
As before, those who already have direct deposit set up with the IRS will receive federal stimulus payments first, unless their banking information has changed. Visit the www.irs.gov website to update your information if needed. All others will receive a prepaid card in the mail, which will take longer. Payments are expected to begin rolling out in early 2021.
Remember, the IRS will never call you to verify any personal or financial information. Please be wary of scams!
All of us here at Raza & Jones, LLC understand this is a challenging time for our clients. As a family law firm, under St. Louis County’s Order pertaining to COVID-19 we are considered an essential business, and we remain open and available to all our clients. Our entire firm is working remotely, using our videoconference account to meet with clients or speaking by telephone. We are committed to delivering the same high standard of compassionate, effective representation we’re known for, in the face of rapidly changing circumstances.
With a combined 30 years in family law, the attorneys at Raza & Jones, LLC, will provide the legal guidance you need. For questions, or to schedule a confidential consultation, call 314-449-8830.
