MFS and Stimulus Payments with Tax Due

[GodFather]

Client is in the midst of divorce proceedings.  Client and her soon to be ex husband did not file 2019 or 2020 returns.  I am preparing the 2019 and 2020 returns for her and filing as MFS since the husband will not provide any tax information to her.  Client claims they did not receive any stimulus payments. 

After preparing the returns, client has an amount due for both 2019 and 2020 in the $500 range.  I assume she will need to pay amounts due with the returns and then the IRS will issue any stimulus payments that are due to her?  The tax due would not be netted from the stimulus payments, correct?

Thank you.    

[BobKamman · Accepted solution]

My guess, not particularly educated, is that the EIP's went into the husband's bank account.  Do you have the 2018 return?  Was the income low enough to qualify?  

A balance due on 2019 won't affect when any EIP is allowed, so file it without payment if there is economic hardship.  (Meaning, at least you should get paid first.)  Is there a balance due on 2020, even claiming a recovery rebate credit?  IRS might disallow it but that will take months and at least you will know for sure what was allowed. 

You can still check online whether EIP#3 was paid in March or April.  If not, that would have to be claimed on 2021 return now.  

No kids, so not qualified for HoH either year?

[GodFather]

Bob...thanks for the reply.  I'll check on EIP 3.  I did ask her for the dates and amounts of any and all stimulus she may have received.  Waiting on that.  

[TaxGuyBill]

You may consider getting the 2020 and 2021 Tax Account Transcripts to see if the IRS indicates if any EIPs were made.