As you are almost certainly aware, President Trump signed the CARES act on Friday, March 27, 2020. This act provides that individuals with an income lower than $75,000.00 and couples filing joint tax returns with incomes lower than $150,000.00 total are entitled to a “stimulus credit” in the amount of $1,200.00 and $2,400.00 respectively. Additionally, families with minor children will be awarded $500.00 per child. While these stimulus credits are likely to provide relief to many Americans the treatment of the stimulus in Michigan divorce cases may surprise you.
Who gets the stimulus in a Michigan divorce?
You almost certainly have questions regarding who is entitled to these credits, how they will be distributed, and the effect of their separation on their entitlement. For example, what happens if you recently completed your Michigan divorce and filed “married filing jointly” in 2018 or 2019? The good news is that, if you filed joint income tax returns in 2018 but have since filed separate returns for 2019, your stimulus check will be direct deposited in the account associated with your separate tax return or will be mailed to your address. However, if you have yet to file your 2019 income tax returns or filed married filing joint in 2019 despite having separated, your stimulus check will be direct deposited into the account associated with that joint tax refund. In the event this account has since been closed or no account designation was associated with the tax return, the stimulus check will be delivered to the address of the primary individual listed on the return and will likely be addressed to both parties, thus requiring both signatures to cash. Less fortunately, in the event one party has simply taken over the account listed on joint tax return, action will need to be taken to ensure the stimulus credit is properly divided. One would hope that the individual receiving the credit would happily transfer half the balance to the other party but, in the case of contentious divorces, a motion may need to be filed in the divorce case to ensure proper division of the credit. In the context of a Michigan divorce case, the stimulus is controlled by the language in the Judgment of Divorce. For example, the if parties are sharing equally in a tax refund or obligation, the stimulus must be shared.
Similarly, it is likely that many Michigan separated parents are wondering which parent will be awarded the $500.00 credit for each child. Per the CARES act, it appears that the credit will be awarded to the parent who claimed the minor child on the most recent return. While this is the simplest solution for congress to ensure credits timely reach families who need assistance, this determination will almost certainly cause conflict within families and may require action. If this is the situation in your case, we would be happy to help assist you in this matter.
Fortunately, the credits created in the CARES act contain similar limitations to a traditional Income Tax Refund. In our arena, this means we are happy to report that individuals with support arrearages can have the stimulus credit intercepted for support enforcement purposes. In other words, if you are owed a significant support arrearage, Friend of the Court is able to intercept the stimulus credit amount to satisfy the support arrearage as they would with an income tax refund.
Above all, we at Findling Law understand that this is a very unsettling time for everyone in Michigan. We know that many people have questions about how COVID-19 is going to affect their financial future, their children’s lives, and their marriage. If you or anyone you know have questions related to divorce, custody, and/or support, we are always there to assist. Please feel free to call or email us at any time and, more than anything, we hope that you and your family and friends are safe and healthy in these unprecedented times.
About Findling Law
I have been exclusively practicing divorce and family law in Michigan for over two decades. The attorneys at Findling Law all share the core value of practicing law to help people navigate change in their lives, without compromising principles. We specialize in high socio-economic, high-profile and high-conflict cases, while also working with clients of all backgrounds. We recognize that the most important aspect of the practice of law is the application of the law to your specific circumstances.
That is why we provide more free information on divorce and family law than any other Michigan law firm. We want to help you manage your situation. Allow our exceptional legal team to help you navigate the change in your life, without compromising principles.
We want to help you manage your situation. Let our exceptional legal team help you manage your situation.
Local: +1 (248) 399-3300 – toll free: (877-YOUR FIRM)
After hours emergency?: +1 (707) 968-7347
Or email me at: Daniel@Findlinglaw.com
By: Morgan A. McAtamney and Daniel Findling