How the Third COVID-19 Relief Bill Impacts Those Who Pay Child Support
Since the Senate passed the $1.9 trillion COVID-19 relief bill on March 6, 2021, the IRS and Treasury Department have delivered over 127 million payments to eligible individuals. Eligible individuals who did not receive a direct deposit can still receive a stimulus payment in the mail as a paper check or EIP debit card. If you have not received the $1400 stimulus check, it might be worth looking into whether or not you are eligible for this round.
Specifically, individuals who earn less than $75,000 a year and married couples who earn less than $150,000 per year should receive $1400 per person, including children. The package is not supposed to provide relief for those who earn more than $80,000 or married couples who earn more than $160,000. This is true regardless of the number of children they have, so anyone who makes more than this amount will not be impacted by the stimulus check.
On the other hand, if you owe child support or you are divorced, you might be curious about how the stimulus check will impact you. Many situations require a parent’s legal child support obligation to be taken out of a paycheck through garnishment, so those who owe child support might be accustomed to their money being revoked. In California, for example, up to 50% of your disposable earnings can be garnished to pay child support if you are supporting a spouse or child who is not the subject of the order. Those who are not supporting a spouse or child can have up to 60% of their earnings taken, and an extra 5% can be taken if you are more than 12 weeks in arrears.
The same restrictions are not true for the third stimulus check. There was a bit of confusion surrounding this topic with the first stimulus check. For the first round, the IRS confiscated stimulus money from some individual’s checks and gave it to the individual who was owed the money. The IRS confiscated approximately 50,000 stimulus checks from those in this situation at the time.
However, they decided to reverse this, and sent catch-up economic impact payments to eligible individuals who submitted Form 8379, Injured Spouse Allocation with their federal income tax return in 2019, or 2018 in some situations. Because some who did not submit this form might have been impacted by the confiscations, the IRS announced their plan to issue the portion of the debt that was given to those spouses as well.
With the second stimulus package, Congress made sure to fix the problem so that those who owe child support received payments. In the COVID-Related Tax Relief Act, the IRS was prohibited from confiscating the money from those who were behind on child support. While this decision helped those who were behind on payments, it did not serve to help individuals in need of child support.
However, this correction applies to the third round of stimulus checks as well. The money distributed in the third round of stimulus checks is supposed to stimulate the economy, not for child support garnishment. If you or another parent owe child support, the IRS cannot confiscate the money for federal or state debts, and the IRS cannot levy the money either.
There are exceptions to this rule, as is the case with many legal issues. Federal law requires child support agencies to have protocol for collecting overdue child support from federal tax refunds. The new bill states that stimulus checks cannot be used for debts to federal agencies, income tax debt, or unemployment compensation debt, the stimulus checks are not exempt from federal offsets for overdue child support in cases enforced by the Child support Enforcement (CSE) program.
If you would like to learn more about the legalities of child support, or you are seeking child support yourself, call Cutter & Lax Attorneys at Law at (818) 839-2533 or contact us online.