Although the Federal Government is still negotiating the amount of stimulus each individual and household may receive in the second round of COVID-19 Stimulus Relief, it is clear that many Americans will receive additional aid from the federal government in 2021.
This second round of stimulus checks is markedly different from the first, however, particularly in family law cases. The first round of stimulus relief was subject to the Debt Collection Improvement Act, which allowed state governments to garnish the first stimulus checks that would otherwise be payable to individuals who owe past-due child support. The second round of stimulus checks, however, are exempt from seizure to satisfy past-due child support. This means that the state governments will not be able to capture a stimulus check from someone who owes past-due child support, so the person who owes support will receive the entire check issued by the Federal Government, and the parent who is owed child support would only receive whatever check the Federal Government issued to that parent in his or her own right.
A similar difference is that the second round of stimulus checks cannot be garnished by creditors or debt collectors, which means that they cannot be seized to pay current support obligations either.
It is not yet clear whether the second round of stimulus checks will slot $600 or $2,000 per person. What is clear, however, is that either option will pay more per child than the first round of stimulus checks did. In the first round, parents received $500 for each qualified child. In the second round, the payment per child would be $600 per child.
Another important difference, however, is that the phase-out window will be smaller. Although the income levels at which individuals, households, and married couples start phasing out their stimulus will remain the same, the cap at which people receive no stimulus funds is lower. That means that many people who received stimulus checks in the first round may be ineligible in the second round.
If you are unsure whether you may qualify for a stimulus check, you should consult a CPA or tax advisor. If you have questions about how your family law case may be affected by the second round of stimulus checks, please reach out to The Harris Law Firm.