Texas Divorces and Division of Tax Refunds

by Ricardo Barrera

Texas Divorces and Division of Tax Refunds

Texas is a community property state. This means any and all property acquired during a marriage is presumed to be the property of the marriage. Tax refunds are considered income and so that income will be deemed community property, which may be divisible as an asset of the marriage.

However, sometimes parties to a divorce are separated for long periods of time and sometimes the details that led to the tax refund are specific enough to where the Court may not order the division of the income derived from the tax refund because one party received no support for the children, no support for the household, or no assistance paying an obligation of the community estate that would have been fairly attributable to both spouses, like property taxes or vehicle payments.

Unfortunately, one party may believe filing the tax return in a divorce is simply a game of whoever is first gets the money. Courts often frown on any bad faith in claiming a tax refund otherwise due to the community estate without apportioning half for other spouse, or without getting the Court’s permission, especially when there are temporary orders or injunctions in place against this type of unilateral action. In one case, a spouse jumped the gun in filing for the tax refund and instead of getting any return, the funds were taken by the State for payment of back child support due in a child support case outside the marriage. In that case, the Court heavily punished the offender with the badly thought out plan.

It’s important to know all your rights in a Texas divorce and not cross the Court by appearing to do unfair or illegal abuse of community property. Call The Barrera Law Firm for a free consultation at 956-428-2822.



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