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Tax injured spouses to get catch-up COVID-19 payments

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Are your spouse's debts are costing you? The IRS has a bit of good news for some husbands and wives. They'll be getting back the coronavirus payment portion they were shorted due to their spouses' unpaid child support. (Photo by Kat Jayne via Pexels)

Congress and the White House may be struggling to reach a deal on additional COVID-19 economic relief payments, but the Internal Revenue Service has stepped up to get some of the original stimulus money to few more folks.

The agency says that next month it will send catch-up Economic Impact Payments (EIPs) to about 50,000 individuals. These are the folks whose portion of the first round of coronavirus payments was diverted to pay their spouses' past-due child support.

These catch-up payments will be mailed as U.S. Treasury checks to any filer who claimed injured spouse relief on their tax year 2019, or in some cases 2018, federal income tax filings.

Injured spouse not liable: Under the terms of the EIPs authorized under the Coronavirus Aid, Relief and Economic Security (CARES) Act, unpaid child support money could be taken from the stimulus amounts.

This is the same state and federal debt offset that's allowed against regular federal income tax refunds.

That meant that in some cases, jointly filing couples who were expecting the maximum $2,400 EIP (plus any additional from the $500 for each qualifying child under the age of 17 as of the end of 2020) didn't get their full payment.

But while the offset was legal, the IRS notes that in joint-filer situations where only one spouse is delinquent with child support payments, the agency will split the joint EIP and send one-half to each spouse. Only the liable spouse's EIP should be offset by past-due child support.

This determination is made in cases where the non-owing spouse filed Form 8379, Injured Spouse Allocation, along with their Form 1040.

Form 8379 Injured Spouse Allocation

 

Form 8379 shows the IRS why the injured husband or wife is not responsible for the other spouse's overdue legal obligations. That way, the portion of any refund, or in this case EIP, due that injured spouse is not diverted to cover the delinquent spouse's debt.

Yes, this document was cited in an earlier Tax Forms Tuesday in connection with spousal abuse and innocent spouse relief. But it earns repeat recognition as this week's featured form thanks to the IRS injured spouse EIP decision.

And yes, I know it's Wednesday, but I was distracted yesterday by recent (California's wildfire, Iowa's derecho) and upcoming (Hurricane Laura) disasters and IRS announced (and expected) tax relief in those catastrophic situations.

No further spousal action needed: If you filed Form 8379 in the last two tax years, then you don't need to do anything but wait for your money.

That shouldn't be too long. The IRS says the checks will start going out in early to mid-September.

The issuance will be automatic to injured spouses who originally saw their share of their joint EIP go toward their husband's or wife's debt.

No 8379, no problem, but longer wait: If you didn't file for injured spouse relief but it's only your spouse who should face lesser EIP consequences, the IRS says don't do anything.

No subsequent Form 8379 filing. No calling the IRS.

The IRS says it is aware of these cases and is working on resolving the issuance of the improperly held EIPs.

The IRS doesn't yet have a time frame for these cases, but says it again will automatically issue the portion of the EIP that was applied to the other spouse's debt at a later date.

In the meantime, it recommends that affected injured spouses — and other taxpayers still waiting on COVID-19 stimulus money — check the status of their payment by using the IRS' online Get My Payment tool.

You also might find these items of interest:

 

Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.

But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.

 

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