Divorce at end of year & EIP/ACTP

Forum|Forum|4 years ago
April 2, 2022
1 reply
10 views

Client gets divorced at end of the year. There is one child.

Each person gets a letter stating they received $2100 EIP, and $750 ACTP. If I list it "as is" the one parent will likely have to pay back the ACTP even though it isn't showing that on the tax return. I assume it will come later. Also, the claiming parent will get the money that was technically deposited into the formerly joint account.

With the EIP, fortunately no one will be paying anything back, but it seems like a double dipping scenario for the parent who is claiming the kid this year.

Are there directions for this scenario that I am not finding? Right now, I expect to enter it all as the letters were written.

Thanks

ProSeries Professional

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qbteachmt

Level 15

"With the EIP, fortunately no one will be paying anything back, but it seems like a double dipping scenario for the parent who is claiming the kid this year."

$2,100 isn't the right amout for two or for three. I've been seeing three letters: MFJ, and the two separates. But the payouts were based on a projection, and if that isn't the reality for the 2021 return, well, that's a problem for Congree.

The repayment for ACTC is forgivable based on an income limit, which will be that tax return.

"Also, the claiming parent will get the money that was technically deposited into the formerly joint account."

Then there won't be any payment consideration.

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A

ajpAuthor

Level 6

Thanks for your response.

I'm pretty sure that the $2,100 = $1,400 + $700 (half the EIP that was because of the dependent).

Each parent got an EIP letter for $2,100.

If they would have stayed married, that would have been the appropriate grand total.

qbteachmt

Level 15

I suspect you have Limited EIP, at $700 per person, because of Income limits?

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