Of the many complex financial issues that spouses may need to address during the divorce process, tax considerations can be among the most confusing. These issues can be a major concern for parents since the ability to claim children as dependents can affect the amount of taxes that a person will pay, the tax credits they can claim, and the tax refunds they will receive when filing their annual tax returns. Parents will need to be sure to understand how to address child-related tax issues both during the divorce process and after their divorce is complete. They will also need to understand how they will be affected by changes in tax laws, including the ability to receive advance child tax credits.

Advance Child Tax Credits for 2021

The American Rescue Plan Act, which was signed into law in March of 2021, allows parents to receive advance payments during the year for child tax credits that will be claimed on their tax returns for that year. For 2021, the child tax credit is $3,000 for a child under the age of 18 or $3,600 for a child under the age of six. Parents may receive monthly payments from the IRS between July and December of 2021, adding up to half of the total amount of the child tax credit. The remaining amount may be claimed on the parent’s tax return for 2021.

Children who will be 17 years old or younger as of December 31, 2021, will qualify for the advance child tax credit, and a parent may receive payments of up to $250 per month. For children who will be five years old or younger as of December 31, 2021, payments will be up to $300 per month. To qualify for the child tax credit, a child must have a valid Social Security number, and a parent must be able to claim the child as a dependent on their 2021 tax return. The tax credit is fully refundable, meaning that even if the amount of the credit exceeds the total taxes owed by a parent, the parent can receive a refund for the full amount of the credit. Even if a parent has an income of $0, they will be eligible to receive advance child tax credit payments, as long as they are eligible to claim tax credits for the child in 2021.

Out of the different types of financial matters that couples will need to address during a divorce, spousal support can often be one of the most contentious issues. While parents will usually recognize that child support will be necessary to provide for their children’s needs, and couples understand that they will need to divide their marital property fairly and equitably, a spouse may be unhappy about the requirement to make ongoing payments to their former partner. However, there are situations where this form of support may be necessary, and it is important for spouses to understand how the laws that address this issue will apply in their case.

When addressing matters related to spousal support and other financial issues during your divorce, you can improve your chances of achieving a positive outcome by working with an experienced divorce attorney. Your lawyer can explain your rights and ensure that all financial factors in your case are considered properly, and they can act as your legal advocate, making sure your rights and interests will be protected in the decisions that are made.

When divorcing spouses share children, the divorce process is much more complex – legally, financially, and personally. If you are a parent getting a divorce in Illinois, it is essential to know what to expect. By educating yourself on child custody concerns, you can prepare for these concerns in advance. The better prepared you are, the better position you will be in to make the decisions that are right for you and your family.

For help, contact a skilled divorce lawyer who understands the unique challenges parents face during divorce and how to meet these challenges head-on. Getting divorced as a parent can seem overwhelming and intimidating, but you do not have to face this situation alone. An experienced attorney can protect your rights, explore your options with you, and help you take the legal steps necessary to accomplish your child custody goals. 

Determining Child Custody 

Illinois no longer uses the term “child custody” to refer to where a child lives and how parents divide parenting authority after a divorce. In 2016, the laws regulating child custody in Illinois changed substantially. Child custody is now broken down into two main components: parental responsibilities and parenting time. However, the terms child custody and visitation are still used informally to refer to parenting obligations and will be used throughout this blog for brevity.

Prenuptial agreements: Are any other legal documents subject to more controversy and misunderstanding? Prenuptial agreements, also called premarital agreements or “prenups,” are legal contracts that a couple signs before getting married. Many people grossly misunderstand the purpose of a prenuptial agreement. They assume that only couples who do not believe in the longevity of their marriage would sign a prenuptial agreement or that prenups are only used by wealthy husbands to prevent their wives from pocketing their wealth.

In reality, drafting a mutually beneficial prenuptial agreement is one of the most responsible and practical steps you can take before getting married. Prenups serve a wide range of purposes, including protecting both spouses’ property rights, avoiding stressful litigation in the event of divorce, and describing how property should be distributed if a spouse passes away.

Although we rarely think of marriage in these terms, spouses who get married enter into a financial partnership with each other. Consequently, a marriage represents much more than the romantic or personal connection between spouses. It also represents a melding of the spouses’ finances. Per Illinois law, spouses are entitled to an equitable portion of the marital estate during divorce. Unfortunately, the process of allocating marital property between spouses in a divorce becomes much more complicated when a spouse lies about finances. 

If you are getting divorced, it is essential to understand your rights regarding the division of marital property, child support, spousal maintenance, and other divorce issues. If you suspect that your spouse is lying about finances or may attempt to hide assets during your divorce, contact a divorce attorney for help right away.

Understanding Illinois Law Regarding Marital Assets and Divorce

Illinois is an “equitable distribution” state with regard to the division of assets during a divorce. This means that by law, you have a right to an “equitable” or fair share of the property contained in the marital estate. Most of the property and liabilities accumulated by either spouse during the marriage fall into the category of “marital property.” Marital property often includes bank account balances, retirement funds, investments, real estate, vehicles, and household items like furniture. Complex assets like stock options, mutual funds, businesses, and professional practices may also fall into the category of marital property. If an asset is considered marital property, both spouses are entitled to a share of the asset’s value.