COVID divorce court delays pose challenge to tax filings

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Court delays are posing year-end challenges to wannabe divorcees who might have to file jointly with their ex if a judge doesn’t sign off on their divorce by Dec. 31.

Mandelbaum Salsburg matrimonial and family law co-chair Lynne Strober has multiple clients facing this challenge, chalking it up in large part to courts slowed down by remote work.

“The court system went through a massive shift when it went from in person, come to court for everything system, to now we’re going to file through a central program and have judges receive it in their house with their staff somewhere else,” Strober said. “The fact that we’re operating where we are is amazing, but one of the problems is it takes longer to do things. I have a couple of judgments of divorce with matrimonial settlement agreements— you complete the agreement and send it into the court with the judgment of divorce and it’s hard for them to process them as quickly as they might have if I came in person.”

As a result, some of her clients will have to wait until January, she said.

The problem with that, she said, is if someone is not legally single on Dec. 31, they can’t file their 2020 taxes as a single person. Even with the terms of a divorce agreed upon, they’ll have to file a joint return, which would require them to disclose their financial information to each other, or file married, filing separately.

“Usually, almost all the time, married separate is not good, tax wise,” explained accountant Richard Sheeler of Hawthorne. “The only time it’s usually good, and I do a calculation for everybody who’s married to see whether it comes out better, I’m gonna say 90 percent of the time married joint comes out better.”

There are a couple of reasons for this, Sheeler said. For one, ”the tax rates are usually skewed in favor of married joint.”

And for married, filing separately, both parties have to agree on deductions—standard or itemizes—and if they choose itemized, the parties have to split the deductions evenly.

“If there’s a house, charitable contribution, they all have to be split in half if you’re married filing separate because one can’t take them all and the other one can’t take the standard deduction,” Sheeler said.

With the courts on emergency duty next week, Strober doesn’t expect the issue to be remedied. She suggested the courts bring back retired judges to process final divorce hearings, but that it may be too late for even that, she said.

“The court system has to prioritize what issues family judges should focus on. The court has to hear emergent applications first. The court’s primary attention is to that,” she said. “Everyone’s trying their best, but it’s another interesting example of the impact of COVID on the court system and where the processing really makes a difference.”