Is Child Support Tax Deductible? How Child Support and Alimony Impact Your Taxes
Is Child Support Tax Deductible?
Is your child support payment tax deductible? According to the IRS, no – your child support is not tax deductible. Child support is also not taxable, it is considered tax neutral.
What is child support?
Child support are payments made from one parent to another in order to pay for expenses on behalf of a child or children. Since this money is used directly for your child, regardless of if you are using or if the other parent is using it, it is considered a personal expense and is not taxable or tax deductible.
Is alimony tax deductible?
Alimony, or payments made to a former spouse after a divorce, is also not taxable or tax deductible. There is an exception made for alimony agreements that were in effect prior to January 1st of 2019, in which case those alimony payments may be included as income by the former spouse and if so, can be deducted from your own taxes.
What other deductions could I claim for my children?
When you are a custodial parent, you may claim your children on your taxes and receive the Child Tax Credit. This credit provides up to $3,600 per child for those earning up to $150,000 as of the year 2021.
If your child does not live with you, the custodial parent may give you the right to claim this credit by signing a form with the IRS – form 8332. When the custodial parent signs this form, it allows the non-custodial parent to claim the child/children as their dependent(s) and therefore claim the Child Tax Credit when they attach form 8332 to their own tax return.
If your children are your dependents, you may claim the Child and Dependent Care Tax Credit, which would cover expenses such as childcare, camp, after-school care, and babysitters. Only one parent may claim this deduction each year.
If you itemize your deductions, even if you are a noncustodial parent, you may claim your child’s medical expenses that you’ve paid throughout the year. This only works if your itemized deduction would be greater than the standard deduction, and if your medical expenses would exceed 7.5% of your AGI (adjusted gross income) – so it may not be advantageous in every situation.
A note on unpaid child support
If you haven’t paid your child support, it’s important to note that the Treasury Department may use your tax refund to catch up on your child support payments to the other parent. Therefore, they may take the refund that is owed to you and instead send it to the other parent so that your child support payments are no longer in arrears.
Should you work with a tax professional?
Divorce and custody arrangements can complicate your tax situation. The guidance of a tax professional can give you the reassurance that you’re not missing anything when it comes to your tax situation and providing for your children. Adding a financial advisor and estate planner to your team can also help you to feel secure in your financial goals for the future when it comes to planning for you and your children.
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