Will Child Support Take the Third Stimulus Check?


How the Third COVID-19 Relief Bill Affects Those Paying Child Support

In response to the devastating effects the COVID-19 pandemic had on the American economy, Senate passed a $1.9 trillion COVID-19 relief bill on Saturday, March 6, 2021. The legislation includes $1400 stimulus checks. Individuals earning less than $75,000 a year and married couples earning less than $150,000 will receive $1400 per person, including children. The package is not set to provide relief for individuals who earn more than $80,000 or married couples who earn more than $160,000 regardless of how many children they have, so if you make more than that amount, the details of the third stimulus check will not affect you.

However, individuals who owe child support and those who are divorced might be wondering what the stimulus check will look like for them. After all, in many cases, federal and state law requires that a parent’s legal child support obligation be automatically deducted from their paycheck through garnishment. One parent in the case will often get a wage garnishment order from the court if the other parent avoids paying child support.

In Alabama, up to 50% of your disposable earnings can be garnished to pay child support if you are supporting a spouse or child. If you are not supporting a spouse or child, up to 60% of your earnings can be taken, and an additional 5% can be taken if you’re more than 12 weeks behind in payments.

The same rules do not apply to the third stimulus check. With the first round of stimulus checks, there were some questions raised surrounding this topic. For the first stimulus check, if you were behind on child support payments, the IRS could have confiscated the stimulus money and given it to the person you owed. From this first round, the IRS actually confiscated 50,000 stimulus checks from individuals in this situation.

They reversed this action, sending catch-up economic impact payments to eligible spouses who submitted Form 8379, Injured Spouse Allocation along with their federal income tax return in 2019, and 2018 in some cases. The IRS was aware that not every person whose payment was impacted filed this form. The organization stated that it was their plan to issue the portion of the debt that was given to the spouse at a later date to individuals who did not submit this form as well.

Moving forward in the second stimulus package, Congress corrected this error so that individuals who owe child support still received payments and so that extra work was not created for the IRS. The COVID-Related Tax Relief Act determined that the IRS cannot take second round stimulus checks from those who are behind on child support. There were mixed reviews surrounding this decision, as it is beneficial for those who are behind on payments, but does not help those who are still in need of their rightful child support payments.

This course correction remains true for the third round of stimulus checks. The funds in the third round of stimulus checks are intended to stimulate the economy and are not subject to child support garnishment. In other words, if you or your spouse owe child support, the stimulus check cannot be garnished or confiscated in order to pay the debt. Your stimulus check also cannot be garnished for federal or state debts, nor can it be levied by the IRS.

As with many legal matters, it is important to note that there are exceptions. For example, federal law requires child support agencies to have procedures for collecting overdue child support from federal tax refunds. While the bill provides that stimulus payments cannot be offset for past due debts to federal agencies, past due state income tax debt, or unemployment compensation debt, it did not exempt the stimulus rebate payments from federal offsets for overdue child support in cases enforced by the Child Support Enforcement (CSE) program.

If you have any questions about what you legally owe for child support, or you are seeking child support, call Shaw Family Law, L.L.C. at (205) 259-7650 or contact us online.