Faq For Recovery Rebate Credits March 2021
If I have to claim a Recovery Rebate Credit on my tax return, will DOR be intercepting this if I owe past-due child support?
Yes. If the IRS issues you any refund based on your 2020 tax return, the entire amount of the refund, including any portion of the RRC, will be subject to intercept for past-due support.
Why is DOR treating the RRC different than if I received an Economic Impact Payment directly from the IRS?
This decision was made by Congress and the IRS that any refund RRC done as part of a 2020 return is subject to intercept by any authorized debt being collected by a government agency, including a states child support agency. You can find more information on the IRS Recover Rebate Credit page.
If I Owe Child Support Will I Be Notified That My Federal Stimulus Rebate Payment Is Going To Be Applied To My Child Support Arrearage Balance
Yes. You were sent a notice when your case was initially submitted for federal tax refund offset. The federal government should send an offset notice to you when your stimulus rebate payment has actually been intercepted. The notice will tell you that your stimulus rebate payment has been applied to your child support debt and to contact the Office of Child Support Services if you believe this was done in error.
New Dependent Guidelines Open Up Eligibility For The Third Stimulus Payment
The third stimulus check makes dependents of all ages count toward the family total, for $1,400 apiece. This time around, a qualifying dependent is anyone you claim on your taxes, including a qualifying child younger than 19 years old, a student younger than 24 years old or a qualifying relative who relies on you for care.
Stimulus check details can make working out your take-home total a little confusing.
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Will My Stimulus Check Be Garnished To Pay Back Child Support
COVID-19 has changed the world for parents everywhere, including those who were already divorced or separated when the outbreak occurred. While the pandemic has wreaked havoc on all of our lives, separated parents often face additional hurdles, including the need to grapple with changing parenting time schedules and the effect of a potential job loss on a child support award. Changing financial circumstances have, in particular, become a hot topic amongst co-parents, many of whom share custody and are responsible for making realgar child support payments. For this reason, the stimulus checks that were sent by the IRS to qualifying taxpayers proved especially helpful to families across the nation.
Its important for co-parents, however, to consider the effect that these types of payments will have on any child support awards, especially if they owe back child support payments, so if you recently received a stimulus check and have questions about whether a portion of that needs to go towards the support of your child, please contact our experienced child support legal team today.
Stimulus Payments for Single Parents
Although a welcome supplemental form of income for many taxpayers, these payments also raised questions amongst those paying child support, regarding the effect of their overdue child support debt on their stimulus payment and vice versa.
How Stimulus Payments Affect Overdue Child Support
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Does My Dependent Qualify Me To Be Included In The Child Care Tax Credit
According to the IRS, qualifying rules for dependents are fairly broad, but a dependent must fit one of the following criteria:
- Be under the age of 13, or
- Be unable to care for themselves if 13 or older (for example, if you have a spouse or older dependent who is impaired and incapable of caring for themselves, and has lived with you for more than half the year, or
- Be physically or mentally incapable of self-care — even if their income was $4,300 or more.
In addition, the qualifying dependent must have a tax identification number, such as a Social Security number.
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You need both letters when filing your return as you will enter both amounts to be added to your tax return. This letter will have the total amount of advance Child Tax Credit payments you received from July 2021 to December 2021, and you will need that number when you file your taxes. Why? The IRS will use this number to help reconcile your advance Child Tax Credit payments basically to make sure you got the right amount. If you should have gotten higher CTC monthly payments, you will get that additional money as part of your refund. If you received too much in CTC payments, you may owe that money back at tax time.
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Letter 6475, Your Third Economic Impact Payment: This letter will have the total amount of your stimulus payment in 2021 . If you didnt get the full stimulus amount you were eligible for, then you may be able to claim those dollars through the Recovery Rebate Credit on your tax return. This letter has all the info you need to report the correct amount of the third stimulus you received and understand if you are eligible for additional stimulus dollars and how much.
What If I Am Married To Someone Who Owes Child Support Will My Tax Return Be Applied To The Child Support Arrears They May Owe
Yes,unless you are eligible for relief. If youdo not owe child support butyouare married tosomeonewhoowes child support,you may need to file an Injured Spouse Claim and Allocation -Form 8379
In some instances, the IRS offsets a portion of the payment sent to a spouse who filed an injured spouse claim if it has been offset by the non-injured spouses past-due child support. The FAQ on the IRS stimulus FAQ www.irs.gov/coronavirus/economic-impact-payment-information-center website states: The IRS is aware that in some instances a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return has been offset by the non-injured spouses past-due child support. The IRS is working with the Bureau of the Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve this issue as quickly as possible. If you filed an injured spouse claim with your return and are impacted by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved.
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If I Am The Custodial Parent And Im Currently Receiving Or Have Ever Received Tanf Or Medicaid For My Child Will I Receive Any Money From A Stimulus Rebate Payment Intercepted By The Federal Government From The Noncustodial Parent On My Case
Maybe. Federal law dictates how monies received by a state child support agency under the Federal Tax Refund Offset Program are distributed. In Rhode Island, federal tax offsets are applied first to assigned arrears, or arrears owned by the state, and then to arrearages owed to the family. If there is money owed to the state in your case, the intercept stimulus payments up to the amount owed to the state will be retained by the state. The remainder of money will be sent to you, up to the amount of unassigned arrears owed to you by the noncustodial parent. The amount of the money you are entitled to receive will depend on a number of factors, including the amount of the stimulus rebate payment intercepted, the amounts owed to you in your case, and the number of other child support cases in which the noncustodial parent owes child support arrears. You must also have a full-service case open with the Office of Child Support Services to be entitled to receive any monies from an intercepted federal stimulus rebate payment.
The Eip Stimulus Payment Prepaid Card: Not A Scam How To Avoid Fees
Some people will receive a prepaid EIP Card intstead of a check. There will be some customer identification needed to activate the card so it can’t be stolen from the mail and activated.
Click on this link for more information on how to use the card. Visit EIPcard.com to see the fee schedule, FAQs and more information.
The IRS has started sending letters to people telling them if they have an unactivated EIP card. If you receive this letter or believe you accidentally threw out the EIP card, call 1-800-240-8100. More information can be found by clicking here.
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Child Support And Third Stimulus Checks: We’ll Clear Up The Confusing Details
The details surrounding stimulus checks and child support have some gray areas. Here’s what to know about garnishment and “double-dipping.”
What are the rules around the third payment and child support?
For parents who share custody of their kids, child support can add some complications to their stimulus check total and eligibility. To add to that, the rules for the third payment have changed from the first two payments, removing a loophole that allowed some families to “double-dip” , among other major changes.
However, there’s some good news for families with children. The new stimulus bill includes a large expansion to the child tax credit that could reduce child poverty by 40%, according to a report from the Center on Budget and Policy Priorities. That’s on top of the $1,400 checks for qualifying individuals and the new bill’s broader definition of dependent, which leads many families receiving more money this time.
Here are the details we’ve got so far, including when your check could arrive, how to track it and what to do if your third stimulus check is missing. Read on as we sort out and explain the complicated details around child support situations and stimulus checks.
How Will I Get The Stimulus Check Payment
There are three ways you can receive the stimulus payments: direct deposit, check, or prepaid card.
If the IRS has your bank account information from your 2018, 2019, or 2020 returns a direct deposit will be sent to that account. If you do not have direct deposit set up with the IRS, you will receive a check or prepaid card. On May 18, 2020, the U.S. Department of Treasury issued a press release stating it has begun to send nearly 4 million stimulus payments by prepaid card instead of paper checks. You can access the full press release issued by the treasury by clicking here.
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Is The Loophole For Joint Custody And Stimulus Checks Closed For The Third Payment
Many parents who aren’t married and share joint custody of their children actually received two payments for the same child during the first round of stimulus checks, if they alternated years claiming those children on their taxes. In other words, if one parent claimed a child in an even year and the other in an odd year, both could receive checks for that child. That’s because the IRS looked at two different tax years — 2018 and 2019 — to determine eligibility for the first check.
For the second stimulus check, the IRS only looked to 2019 tax returns, but that doesn’t mean the double-dipping loophole was closed entirely. If you’re a parent in a joint-custody scenario like the one above and you typically claim a dependent child in odd-numbered tax years, you may be able to get a duplicate $600 child dependent payment as a tax credit when you file and claim the child on your tax return, similar to what you’d do if you did not receive a second stimulus check despite being eligible for one.
That loophole could be closed off in the new stimulus bill that authorizes the third check. According to Andy Phillips, director at The Tax Institute at H& R Block, parents who aren’t married to each other and who alternate custody of an eligible dependent might not both qualify to receive stimulus money for the same dependent this time around.
Responds: Will I Receive The $600 Stimulus Check If I Owe Child Support
PROVIDENCE, R.I. Qualified Americans could receive their $600 stimulus check as early as Wednesday.
Viewers have been writing into 12 Responds wondering if and when they will receive their stimulus check.
When asked how she felt about the stimulus check, Providence resident Sydney Rosendale said its definitely not enough.
I think people are losing their houses, she said. Right now, its really sad.
While many agree more needs to be done for those who are struggling, one viewer said the additional relief is raising more questions and concerns.
My fear is that our houses are going to be reassessed at a higher rate, and for people who are living off a stimulus check theyre going to be facing tax bills coming in the towns and they wont have enough money, Victoria Daffner said.
The money for stimulus checks wont come from municipalities raising taxes, since its a one-time additional tax credit being advanced to qualified Americans. The federal government is borrowing the money.
Another viewer wrote in asking: If I owe back child support, will I get a stimulus check?
A document from the House Committee on Ways and Means says yes. Anyone who made less than $75,000 in 2019 will receive the full $600, unlike the previous round of relief.
The form of payment, whether it arrives via direct deposit or in the mail, depends on what tax information the IRS has, and it should arrive before Jan. 15.
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Will The Second Stimulus Check Be Affected By Wage Garnishment
The COVID-Related Tax Relief Act states clearly that the second round of stimulus payments is not subject to garnishment by debt collectors or creditors. In addition, stimulus money cant be lost due to bankruptcy proceedings.
Wage garnishment occurs when a court orders a persons salary or other payments to be withheld to pay other debts owed. The most common reasons for wage garnishment include child support, unpaid taxes, consumer debts, and student loans.
Third Stimulus Check And Child Support
The previous two stimulus packages treated those owing back child support differently. With the first stimulus, payments to individuals that owed child support could be reduced to offset any back child support owed. The second stimulus act did not garnish payments if the individual owed past-due child support.
There is no way to predict the details of the next stimulus package, but child support has been addressed in the latest proposal being debated in Congress. According to this proposal, people who owe child support would be able to get their full stimulus payment, but possibly only on advance payments such as a paper check, direct deposit, or EIP card that is sent automatically by the IRS. The final package will go into greater detail about how past-due child support will impact any stimulus check money received.
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Missouri Intercepts $78 Million In Stimulus Money From People Who Owe Child Support
The CARES Act passed by U.S. Congress last year allowed states to block the first stimulus payment to people who owed child support. Last April, Gov. Mike Parson said he was supportive of using that approach.
If you owe for your children, you need to pay for your kids. They should be a priority of yourselves, the governor said during a coronavirus briefing on April 10, 2020. If theres an opportunity to take that money and make sure we get it to those kids where they need it, by all means well be taking it.
According to Parson spokeswoman Kelli Jones, the Missouri Legislature passed a bill during last Novembers special session that allows the state to continue intercepting federal stimulus payments to pay custodial parents money they are owed.
Rebecca Woelfel, spokesperson for the state Department of Social Services, says between May 2020 and January 2021, Missouri captured $78.8 million total in stimulus payments from 60,842 individuals who owe child support.
Woelfel says most of the funds go to the custodial parent. Four-percent of the funds were retained for debt owed to the state for custodial parents who executed an assignment of rights for periods when the family received TANF, temporary financial aid to needy Missouri families.
The payments were intended to provide an injection of cash to millions of Americans struggling to get by while the coronavirus pandemic continues to wreak havoc on the economy.
How Is Child Support Connected To The Third Stimulus Payment
With the third check, if you’re past due on child support, you can still receive your full stimulus payment. It won’t be redirected to cover late support payments. This holds true for any past-due federal or state debts: Your third payment is not subject to reduction or offset. However, private debt collectors may be able to redirect your payment to cover a debt.
Also, the IRS can withhold all or part of a stimulus payment if you’re claiming it as Recovery Rebate Credit when you file your taxes. An independent taxpayer advocacy group within the IRS is working with the agency to address this issue.
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