I seem to be getting a lot of comments and questions related to child support arrears and offsets around the advance/expanded Child Tax Credit (CTC) and stimulus payments (recovery rebate credit) for adults and their child dependents.
The IRS has confirmed that the stimulus check (economic impact) payments will NOT be offset or intercepted for those owe tax, have a payment agreement or owe other federal or state debts. It will only be OFFSET by 50% for past-due child support. This is because a court order for child support continues until it is modified or terminated.
Similarly for advance CTC payments the IRS will not be reduce (or offset) payments for past-due child support or overdue taxes from previous years or other federal or state debts that you owe. Because of this you won’t need to file a an injured spouse claim (Form 8379) for overdue taxes from previous years. Note that CTC payments garnished in certain circumstances. See section below for more on this.
2021 Child Tax Credit Payments
Millions of families will be eligible for the expanded Child Tax Credit (CTC) – $250 to $300 p/month – that will start paying from mid-July. However like the stimulus dependent checks, there will likely be payment issues for those adults who share custody or are in dispute over who can claim the child dependents.
The IRS will use the latest tax filing (or non-filer tool data) to pay the monthly CTC. And if you share custody only one of you can claim a child. So It’s either you or your ex-spouse. The IRS will not withhold payment for past due child support. So just make sure you file early and have your latest tax return with the IRS. Also expect delays if the IRS sees two claims for the same dependents.
While CTC payments are not subject to federal offsets or past due child support, they will be subject to garnishment according to the IRS. This includes garnishment state, local and private creditors.
Note that if you receive a refund when you file your single or joint 2021 tax return (in 2022), any remaining Child Tax Credit amounts included in your refund may be subject to offset for tax debts or other federal or state debts you or your spouse owe. You can file Form 8379 with your 2021 tax return in this situation to ensure your payments are not offset due to your spouses previous debts.
2021 Tax Season – Injured Spouse Claims and Refund Offsets
If you filed a joint return and you’re not responsible for your spouse’s debt, you’re entitled to request your portion of the refund back from the IRS. You may file a claim for this amount via your 2021 return by filing Form 8379, Injured Spouse Allocation.
[IRS update] Following several issues around payment of the dependent stimulus’, the IRS has announced it will be sending catch-up checks to about 50,000 individuals whose portion of the Economic Impact Payment (EIP, or stimulus check) was diverted to pay their spouse’s past-due child support.
These catch-up payments are due to be issued in early-to-mid-September. They will be mailed as checks to any eligible spouse who submitted Form 8379, Injured Spouse Allocation, along with their 2019 federal income tax return, or in some cases, their 2018 return. These spouses do not need to take any action to get their money. The IRS will automatically issue the portion of the EIP that was applied to the other spouse’s debt.
The IRS is aware that some individuals did not file a Form 8379, Injured Spouse Allocation, and did not receive their portion of the EIP for the same reason above. These individuals also do not need to take any action and do not need to submit a Form 8379. The IRS does not yet have a timeframe but will automatically issue the portion of the EIP that was applied to the other spouse’s debt at a later date.
The IRS is aware this issue where a portion of the stimulus payment is sent to the spouse who filed an injured spouse claim has been offset by the non-injured spouse’s past-due child support. The IRS is working with the Bureau of 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. They have advised that 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.
The above is creating a heated discussion and a sampling of comments from related posts below show the divided views on this topic (click the link under the name to see the related full post/comment, where applicable)
(Geneva) I filed electronically on 1/27 with Injured Spouse form. My account has been in process mode since 2/3/2020. My stimulus check along with my spouses was intercepted by his back child arrears from. Over 30 Years ago I have no income he is on disability his disability is garnished each month for back arrears. I was counting on my stimulus money and yet it was intercepted and we have no way of getting it back or contacting anyone in the IRS dept. Their should not have been any holds or garnished money from these stimulus checks we all need the money right now the kids he are paying back welfare to are all. Full grown adults and received their own stimulus money no one lost out of any support if my money or his was not intercepted. Injured spouses need answers STAT no one is answering these questions no one is speaking about the injured spouses getting their stimulus money or refunds. Stand up for #Injuredspouses and get us our money we all are in dire need at this time
(Ali) The injured spouse form didn’t work for us. I file it with our taxes every year and they still intercepted all our of stimulus. You’ll get a letter saying your money was sent to child support. Contact child support because getting through to the IRS right now is next to impossible. Contest it there and you may get yours.
(Laura) Very thankful for my husbands ex. All of our stimulus was intercepted for back support. I was okay with it because she is owed that money but she let us know that she is going to send it back to us because she knows we are both out of work right now. He plans to continue paying her after he pays off support to make up for the fact that this money will come off what he owes her even though she is sending it back to us.
(Tina) We have been closely monitoring this situation with child support and injured spouse filers. In summary we believe there was a systematic glitch at the IRS resulting in the error of the 100% offset instead of the 50% offset for the stimulus. There have been cases where even tax refunds have been 100% offset when normally the IS spouses has normally gotten their share of the refund. All we can do is wait for the IRS to open up and speak to a live person. But right now it seems like they are aware of the situation.
(Madyson) Our WHOLE stimulus check was intercepted. My current husband owes arrears and they took mine and my children’s from another marriage! Ironically my ex doesn’t file taxes so I won’t even get his. How am I supposed to support my kids??
(April) This is incorrect for the injured spouse, Me along with thousands of others have filed injured spouse EVERY year, the IRS messed up for the stimulus, they split the stimulus in half and then gave child support BOTH portions of the stimulus leaving me and my three children with nothing. I get taking my husbands but not the entire house hold amount . ( please save the ” people who owe child support are dead beats” crap talk because you don’t know our situation or many others who are going through this same thing). I just wish people would quit issuing articles or information stating that the injured spouse form will suffice and start reporting the fact that IT DID NOT get processed.
(Tori) As i was a single parent at sometimes working 2 jobs & going to night school, i received food stamps. Always telling the truth about my earnings as well as even when my ex husband paid me cash, i reported it. My children are in their late 20’s early 30’s, receiving back support only due to loosing my job over this corona crap, my tax returns were intercepted from the county from years ago giving me the help in food stamps i never knew that they expected paid back. Now I am furious that they want everything i have when I’m in need. Haven’t even received unemployment yet have to wait till mid April and wondered will they intercept my stimulus check also?? Its almost a kick’em when they’re down then while they’re down lets give a few more boots to the gut till they die. Is this population control at its finest or what?
(Sarah) CHILD SUPPORT ANSWER: if you arrears for child support. There’s no off set. You will NOT receive your stimulus check. It is intercepted and sent to child support off and applied to amount owed. Look up Debt Collection improvement Act 1996
(Kee) I’m in IL, filed taxes on March 14 with H&R block, both were accepted same day. Received federal back March 20. State still says processing. Weird thing is I called to see if my state was going to be intercepted, I was told no; I would get my entire return back. Called back last week after 3 weeks and was told it was due to be intercepted!!! I had to send over documents to prevent that. Just my opinion but I think in addition to fraud the state is trying to hold tax refunds for organizations to collect on a debt (e.g red light tickets). Still waiting on state refund. Same children have been files year after year. They see its not fraud.
(Meredith) Well at least you received something. Injured spouse received nothing for their child and not even half of the stimulus check. IRS site states payment was sent April 15, 2020. I always file injured spouse and now the husband is a disabled VET. He owes back child support way before my time. I am the only one who pays income taxes and all my money went to pay his debt, even my child’s portion.
Note that if you were current with your child support payments at the time of the stimulus eligibility determination (end of March) but fell behind afterwards due to a COVID-19 related job loss, you would still be eligible to get the full stimulus payment.