Stimulus checks and the Injured Spouse
This is a cutting edge tax issue brought to us by Covid-19. We see this in Atlanta, GA, our home town – and it is cropping up around the country as well.
There are two types of tax relief for spouses, innocent spouse relief and injured spouse relief. Innocent spouse relief eliminates all or part of a liability from a joint tax return if various conditions are met. Injured spouse relief is different. It does not eliminate or reduce the tax on a joint return. Rather, injured spouse relief allows one spouse to receive a portion of a joint tax refund taken by the government to offset a pre-existing debt of the other spouse.
For example, injured spouse relief applies where the IRS applies all or part of a joint tax refund to pay the past due child support obligation of the other spouse.
What happens when the IRS takes stimulus checks to pay past due child support of a current spouse? The CARES Act provides stimulus checks to assist Americans needing relief due to the Covid-19 pandemic.
The National Taxpayer Advocate recently confirmed that injured spouse relief is the mechanism to use to fix the situation of stimulus checks taken to offset past-due child support. The Advocate also remarked that the IRS is developing an internal procedure to reissue stimulus checks in these cases.
Action to Take
Form 8379 if the form to use for injured spouse relief. If you have filed a Form 8379, there is nothing you need to do. The IRS will issue the injured spouse’s portion of the stimulus check in the coming weeks. If you are eligible for injured spouse relief but have not filed a Form 8379, you should do so to have your portion of the stimulus check reissued
For further information, check out our blog post and video on innocent spouse relief.
For more information about injured spouse and innocent spouse tax relief, IRS issues, or other tax and accounting matters, give our Atlanta office a call at 678-235-5460. If you would like to learn more about the services we provide, visit our Home Page!
Founded by Gary Massey, CPA, Massey and Company is a boutique CPA firm is located in Atlanta, Georgia serving the needs of small businesses and their owners.