The COVID-19 pandemic has disrupted virtually every aspect of life. If you and your ex-spouse had settled into a co-parenting pattern that works well for your family, the pandemic has placed new challenges in front of it. There is no ideal time to divorce, but having to confront your spouse about the terms on which to end your marriage is doubly stressful. Even though it could be months, or even years, before you can go to a restaurant with your children and savor the feeling of freedom that comes with your divorce being final, the emergency legislation passed to help families and businesses weather the storm of the coronavirus pandemic may bring clarity to your equitable distribution or child support case. The family law attorneys at Iwanyshyn & Associates in Greater Pittsburgh can help you benefit from the emergency funding and required financial disclosures associated with the new legislation, while maintaining social distancing, of course.
2019 Tax Season
As coronavirus cases were documented in an increasing number of states in March, leading to social distancing measures and stay-at-home orders at the local and state levels, the federal government extended the deadline for income tax returns from April 15 to July 15. Once taxpayers file tax returns this month that reflect their 2019 income, courts will have more updated information about parties’ income, on which they can base their decisions about equitable distribution, alimony, and child support.
In the spring of 2020, the federal government issued stimulus checks to every American taxpayer who earned $99,000 or less in 2019. Individuals who earned $75,000 or less received a one-time payment of $1,200, and those with slightly higher incomes earned slightly less. In addition, parents were paid $500 for each child.
Several points of contention can arise with regard to stimulus payments and divorced families. First, if you and your spouse are separated and going through a divorce, but you were still together at the end of 2019 and filed taxes jointly, the government might send just one check for the whole family. Your spouse could pocket the entire stimulus check of $2,400 (or more, if you have children), unless you raise the issue in court. For children with divorced parents, the government sent $500 to the custodial parent, but their decisions about which one is the custodial parent were somewhat arbitrary.
The stimulus checks were virtually immune to garnishment. People still received them even if they owed back taxes or past-due payments on student loans. Virtually the only obligation that could keep a person from receiving the federal stimulus money was past-due child support. If you owed child support payments that you were late on paying, then your stimulus check would be sent directly to your ex-spouse to fulfill all or part of your past-due child support obligatioms.
Forgivable PPP Loans
The Paycheck Protection Program (PPP) is one of the provisions of the CARES Act. It offers low-interest loans to businesses that employ 500 people or fewer. The purpose of the loans was to enable businesses to continue paying their employees rather than furloughing them, and therefore to reduce the number of people who would need unemployment benefits. If recipients used a certain percentage of the PPP loan funds to process payroll in the first months after they received the loan, then the loan would be forgivable. If you or your ex-spouse is a small business owner who received a PPP loan and is eligible for loan forgiveness, then the amount of the forgiveness loan does not count as taxable income. The amount does, however, count toward the recipient’s income for purposes of calculating equitable distribution, alimony, and child support.
Self-Employed Business Owners and Gig Workers
When one former spouse is self-employed or earns an income from gigs that vary from one year to another, it can be very difficult to determine that spouse’s income for purposes of equitable distribution, alimony, and child support. Here is where pandemic-related emergency funds can really be a boon to families in conflict over income-based court decisions. During the pandemic, the government provided assistance to self-employed people and those who work in the gig economy, but only if they provided detailed information about their recent earnings. You can use your application (or your ex-spouse’s application) as evidence of your or their current financial situation.
Iwanyshyn & Associates Can Help You Resolve Financial Disagreements with Your Ex-Spouse During the COVID-19 Pandemic
A virtual meeting with your family law attorney could be just what you need to help you finalize a divorce put on hold by the pandemic or collect child support payments that your ex-spouse has been evading. Contact Iwanyshyn & Associates in Greater Pittsburgh & Western PA for help collecting child support or dividing your marital property equitably. 412.414.1570