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If you requested an extension from the IRS, your final deadline to file your 2020 taxes is now looming. Before filing, check your status from previous tax returns and consider the following circumstances that could make a significant difference in your tax burden or overall financial situation:  

The child tax credit 

The new child tax credit didn’t exist in 2020. If you haven’t yet filed your 2020 taxes, the federal government will automatically send the new credit to whoever claimed the child as a dependent in 2019. If custody status has changed since then, be sure to make that adjustment, so the appropriate parent gets the credit. 

Claiming a child on alternating Years  

 If you and your former spouse have agreed to alternate who claims a child as a dependent, the parent who claimed the child the previous year will automatically get the benefit. Be sure to account for this modification.  

Income and child support  

Child support payments are calculated through tax-reported income. If you or your former spouse were laid off or received a drastic salary reduction in 2020 due to the COVID-19 recession or for any other reason, will significantly reduce the child support obligation.  

Similarly, a parent who is a self-employed, high-income earner may have been able to write off a significant portion of employee salaries through the federal government’s payment protection program, making it appear as though their income was significantly less than it was, allowing them to pay less in child support. If you’re the custodial parent, you may want to consult an accountant regarding how to evaluate high-income earners during this unprecedented economic time.  

Quick cash?  

In the event of a divorce, consider long-term tax implications before selling a home or cashing out a retirement account. If a home is awarded to either spouse in the event of a divorce, neither party pays capital gains taxes.  However, if the home is sold as part of the divorce, there will be a tax obligation that will need to be resolved if there are no other deductions or credits. 

Seth Harris, a senior associate at the PMK family law division, is available to help you work through any issues related to divorce and child custody, as well as all family law needs. For more information, go to https://www.hawaiilegal.com/practice-areas/family-law-2/. 

Note: The attorneys of PMK do not provide tax advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax advice. You should consult your tax advisors before engaging in any action. 

PMK partnered with HUGS to sponsor a Dad’s night “in” on September 14th.  HUGS is an organization that helps strengthen Hawaii’s families and improve their quality of life as they face the emotional and financial hardships of caring for a seriously ill child.

Master Sommelier Patrick Okubo, one of only 4 in Hawaii, provided a virtual wine tutorial for the participants. The dads were very engaged, asked lots of questions and shared lots of laughs.  They also enjoyed a take out pizza dinner to go with their night!

To learn more about HUGS, visit https://www.hugshawaii.org/.

PMK Partner R. Laree McGuire spoke with host Raelene Tenno and Na Lan from Damon Key Leong Kupchak Hastert on ThinkTech Hawaii’s Condo Insider on September 9, 2021. McGuire and Na Lan discussed obligations and legalities of condominium boards providing access or mandating Covid-19 vaccinations for their owners, renters and guests.

One of the most difficult situations when it comes to divorce in Hawaii is if one parent wants to relocate with their children to another island in-state, a state on the mainland, or even a different country.

In the state of Hawaii, such a decision is especially consequential because joint custody or extensive visitation is virtually impossible, and planning for visits with the noncustodial parent can be burdensome and expensive.

In deciding where children will live, judges – often after consideration with a report from a fact-finder or custody evaluator – look at what is in the best interest of the children. To make a decision, the court examines evidence of factors relevant to their lives such as:
• Academic opportunities
• Accessibility to medical services
• Additional family support
• Religious opportunities
• Cultural opportunities
• Safety and who else resides in the prospective home
• The physical residence and the neighborhood for which it resides
• Childcare
• Quality of life, climate, and demographics
• Travel to see the noncustodial parent
• Communication with the noncustodial parent
• Community resources

Providing a thorough relocation plan that addresses the above issues can strengthen a parent’s case. International relocations have additional complications such as cultural and language concerns.

If you wish to relocate with your children following a divorce, or if your former spouse or significant other is seeking to relocate your children against your wishes, an experienced family law attorney can help you navigate this process and advocate for your preferred location.

Seth Harris, a senior associate at the PMK family law division, can help you prepare a relocation plan to strengthen your case for why a move is in the best of your children, or assist you with any of your legal needs related to child relocation and divorce. For more information, go to:www.hawaiilegal.com/practice-areas/family-law-2/.

Partner Christian P. Porter was a featured panelist at the Hawaii Council of Community Associations (HCCA) August 26th Webinar – Is your Condo Building Structurally Sound? Porter discussed ‘Revisiting Fiduciary Duty in Light of the Florida Condo Collapse’, which focused on Board Members’ duties given this recent major event.