If you’re like many, with the passage of the Coronavirus Aid, Relief, and Economic Security Act (known as the CARES Act), your family may qualify for stimulus aid in the form of a cash payment. In the coming weeks, you may receive from the federal government a payment called a Recovery Rebate.
The rebate provides the following refundable tax credits:
- $1,200 for individuals
- $2,400 for joint taxpayers
- A flat $500 for each child (for taxpayers with children)
The rebate would not be counted as taxable income for recipients, as it is a credit against tax liability and is refundable for taxpayers with no liability offset.
It phases out as follows:
- $75,000 for singles
- $112,500 for heads of household
- $150,000 for joint taxpayers (at 5% per dollar of qualified income, or $50 per $1,000 earned)
Additionally, it phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children.
All individuals also benefit from the IRS extension to July 15, 2020 to file their income tax returns.
The Measures May Add Additional Conflict to Divorce Proceedings
Although the CARES Act and the IRS tax filing extension will undoubtedly help many, for those going through a divorce, additional conflict and questions may arise. How much of the stimulus aid should each spouse get? Should the tax return be filed separately or jointly?
If you’re going through a divorce in New York City or the surrounding areas and have questions in this area, please call Cohen Forman Barone at (212) 577-9314 or contact us online. We can help. We will get you through this.