Second Stimulus Majorly Changes How Child Support Payments Work

A happy young family prepares to bake chocolate chip cookies together, a boy and a girl about toddler age helping mix and stir the ingredients.
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In the second stimulus round, some important rules are changing for parents who owe child support.

In the first stimulus, the Coronavirus Aid, Relief and Economic Security Act passed last spring, states were allowed to intercept and seize a portion, or all, of direct payments to parents with child support arrears. That’s because under the CARES Act, the Department of Revenue could submit to the IRS names of parents who owed past-due support of more than $150. “Your entire Economic Impact Payment under the CARES Act can be offset, up to the amount of your child support debt,” noted the Treasury Department.

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However, the rules for the second round of direct payment checks are changing in the new $900 billion COVID-19 relief package.  While the first round of economic impact payments in 2020 were required to be intercepted from parents who owed child support, the economic impact payments authorized in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 will not be intercepted from parents with child support cases.

Make Your Money Work for You

In addition, second-round stimulus money can’t be taken to pay back taxes or other debts owed to the federal or a state government.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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