A former mediation client writes:
I recently received a stimulus check of $1200 and I’m wondering if the $600 I received for [our child] should be divided and sent to [her Father] or will he receive his own check as well?
How should we handle this sort of situation?
This is a familiar question these days. And it may be of more interest if/when the next stimulus, proposed to be $2,000 each, comes out. Add to it that the state of California is considering another $600 per person stimulus for low-income people.
As a starting point, I’d recommend you review our blog post here: https://familypeacemaker.com/how-does-child-support-work/
The California State Child Support Guidelines calculators [i.e., Dissomaster, X-Spouse] utilizes gross income in making calculating and allotting the amount for support. In California Family Code section 4058 provides that gross income is income from any source except child support payments received and public assistance based on need. Generally, this may include:
- Salaries and wages including:
- Commissions
- Bonuses
- Unrealized stock gains on unexercised options
- Pensions
- IRAs
- 401Ks
- Retirement in payout
- Interest income
- Rents received
- Dividends
- Unemployment insurance
- Disability insurance benefits (if it intended to replace income)
- Income from a trust or annuity (unless connected to a non-income source such as personal injury proceeds)
- Benefits paid as a result of a worker’s compensation case
- Employee benefits to the extent they reduce living expenses
- Social Security benefits
- Alimony that is received from an unrelated case to the parent that seeks child support.
It’s a long list.
You will be happy to know [perhaps] the Federal government stimulus checks are NOT income, as defined in either the federal or California statutes. According to the IRS.gov website, the payment is not income and you will not pay a tax on it. It appears the payment will neither increase your tax obligation nor reduce your refund if you’re expecting one. It is, in essence, an advance on a tax credit you will claim on your next tax filing. [Please consult a CPA regarding properly filing your taxes].
Since the payment is not income and is a net neutral with no impact on your taxes, it would have zero affect on your current child support order if nothing else has changed. [In the event of a loss of job, new job, unemployment or other financial change of circumstances, please seek consultation as soon as possible!]
Likewise, the stimulus payments will have no effect on your healthcare coverage under the Covered California exchange.
What about the proposed California Golden State Stimulus? The stimulus package would provide $600 per person in cash to Californians who received or are eligible for the California Earned Income Tax Credit. This includes individuals who earn less than $30,000, as well as undocumented households that are excluded from the federal stimulus package.
The public information is not clear yet, the legislation has not yet passed, and State Franchise Tax Board has not rendered any opinion in this regard, but we would anticipate this stimulus being of the same nature and non-taxability as the Federal Stimulus. Stay tuned.
Finally, only the parent who claims the dependency exemption will receive the stimulus payments to your children. Both parents will not receive a check for the same child. This probably raises a ‘fairness’ issue in the other parent’s mind, but that’s how it works. Working out the ‘fairness’ issue is a matter between the parents.
For assistance with your child support and other family law questions, contact us at Family Peacemaker for a free one-hour consultation. Family Peacemaker provides mediation and collaborative family law services in Orange County and the surrounding areas.
This article is not legal advice. It is general information. You should not rely on it regarding your specific situation. Please seek individual consultation if you have questions about your situation.
