PADUCAH — More than 700,000 people will get divorced this year. One of the top three reason for divorce is finances. Paducah divorce lawyer Jeff Alford said while couples are dividing up assets right now, their stimulus check will be one of them.
"Those are going to be considered marital property, so those are still going to be subject to division as part of the divorce," Alford said.
The stimulus check provides $1,200 to individuals making $75,000 or less and $2,400 for couples that make $150,000 or less. The rebate is reduced by $5 for each $100 in income over those thresholds, and eventually payments phase out for individuals making more than $99,000 and for couples making more than $198,000. Taxpayers also will receive another $500 per child.
You should start looking at your most recent tax filing.
If your divorce case is still in the court system or you were legally married as of Dec. 31, 2018, you must file your federal tax return as a married couple.
You do have filing options of married filing jointly or married filling separately, certified public accountant Dean Owen explains.
"An amicable divorce where both sides can trust trust each other not to run off with the money, then married filing jointly would probably make sense," Owen said. "If it's very contentious and a lot of distrust in the relationship, they may want to file married filing separately and pay a little more tax."
That will result in you and your spouse having two separate stimulus checks, Owen said, but you may have more tax liability. If you have already filed your 2019 tax return, you can amend it.
"You could go back, but at this juncture it's probably already filed — let it roll," Owen said. "You could file a return and separate things out, but I don't know if it would get processed in time before the stimulus payments are made."
If you're already divorced and filing separately with children, only one person can claim a child.
"There is no guidance put out, but we are reasonably confident that whoever claimed the child on the tax return will get the $500," Owen said.
Alford said there are some court restrictions for certain divorced couples.
"If you are already divorced, it's probably going to be controlled by what your court order says in terms of who who gets to claim the children for the federal tax dependency exemption, " Alford said.
If you have a unique situation and have questions, you should reach out to your tax professional or CPA. The federal and state filing deadline for tax returns has been extended from April 15 to July 15, 2020.