It’s feasible for someone whose PPP loan is past due to have it garnished in order to settle unpaid child support obligations. It’s important to keep in mind that depending on the law and the jurisdiction, PPP loan regulations, support cases, and child custody cases can change. Additionally, the particulars of each case may affect whether the loan can be garnished. The best course of action is to speak with a local child support agency or a legal expert if you’re concerned that your PPP loan may be garnished for child support. They can offer guidance that is specific to your situation.
The short answer is no, child support cannot take your PPP loan. However, the situation is a bit more nuanced than that. Although the PPP loan is not regarded as income for the purposes of child support, how you use it may have an effect on how much you have to pay in child support.
Here’s a breakdown of the key points to keep in mind:
PPP Loans are not considered income for child support
This means that the loan proceeds will not be directly added to your income when calculating your child support obligation
However, how you use the PPP loan can affect your child support.
If you use the PPP loan to pay for business expenses that are not typically deductible for child support purposes, such as personal expenses, your child support obligation may be increased.
It’s important to keep good records of how you use your PPP loan.
This will assist you in keeping track of your spending and help you stay out of trouble with the law.
You should speak with an attorney if you have any concerns about how your PPP loan will impact your child support.
You can make sure that your rights are upheld and that you understand the law by working with an attorney.
Here’s a deeper dive into the details:
The CARES Act:
The CARES Act, which created the PPP program, does not contain any provisions allowing a financial institution to disregard a garnishment order to pay child support or private creditors. This means that your PPP loan can be garnished to pay child support.
The PPP and Healthcare Enhancement Act:
The PPP and Healthcare Enhancement Act (the “Act”) does not contain an exemption from garnishment by private creditors. This means that your PPP loan can also be garnished to pay private creditors, such as credit card companies or student loan lenders.
How PPP Loans Can Affect Your Child Support:
As mentioned earlier, how you use your PPP loan can affect your child support. If you use the loan to pay for business expenses that are not typically deductible for child support purposes, such as personal expenses, your child support obligation may be increased.
For example, if you use your PPP loan to buy a new car, that expense would not be deductible for child support purposes. This means that the court would likely consider the cost of the car when calculating your income and could increase your child support obligation accordingly.
It’s important to keep good records of how you use your PPP loan.
This will help you document your expenses and avoid any potential issues with the court. If you are audited by the IRS, you will need to be able to show how you used the PPP loan.
If you have any questions about how your PPP loan will affect your child support, you should consult with an attorney.
An attorney can help you understand the law and ensure that your rights are protected. They can also help you develop a plan for using your PPP loan in a way that will not negatively impact your child support obligation.
Here are some additional resources that you may find helpful:
- The U.S. Small Business Administration (SBA) website has a wealth of information about the PPP program, including eligibility requirements, how to apply for a loan, and how to use the loan proceeds.
- The IRS website has information about the tax implications of PPP loans.
- The National Child Support Enforcement Association (NCSEA) website has information about child support laws and regulations.
While the PPP loan itself is not considered income for child support purposes, the way you use the loan can impact your child support payments. It’s important to keep good records of how you use your PPP loan and to consult with an attorney if you have any questions.
December Relief Bill Provision Shocks Tax Professionals by Making PPP Expenses Deductible
In a socially uneasy time, Congress voted on December 2nd to repeal and avert another coronal virus outbreak. Despite Trump’s resounding presidential bid in the 2020 election, Senate control still remains in Georgia. The case of covid was on a national scale. The COVID bill was passed on 27 January 2019. This act is the product of an incredibly turbulent political system. Tax professionals and attorneys were shocked to hear that the new federal law would affect them.
Why Will PPP Loans Create Chaos in Alimony and Child Support Cases in 2021 and 2022?
The primary reason for the chaos in the children versus spouses case is that the PP loan will place an excessive burden on the taxpayer. 1. ) PPP loans cannot be tracked on payroll taxes. Returns will not be possible in 2023. Paying employees is an act of “acceptable lending,” so business owners are not required to report the PPA as gross income. Though a careful reader might find a PPP lender remitting income taxes, it is sometimes hard to spot.
Ask Carolyn Woodruff: PPP and Child Support
FAQ
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