Child support is the basic financial responsibility of all parents of minor children. Parents, whether together, separated, or divorced all carry with them a responsibility to care and provide for their children. How much you will have to pay or will receive depends on how much residential time you spend with your child and the financial resources of both parents.
Child Support is Not Taxable
Child support is not income and therefore not taxed, according to the IRS. Thus, it is tax-free to the receiver. It is also not tax deductible to the payor. Generally, the primary custodial parent can claim the child as a dependent however if an agreement can be reached, the right to claim the child as a dependent can be given to the other parent.
As opposed to child support, spousal support is considered income for tax purposes and is thus taxed to the receiver while being tax deductible to the payor. In the past, in cases where spousal support is ordered alongside child support, the amounts of the support could be shifted to maximize tax benefits.
Spousal support could be increased while child support would be decreased, resulting in the same net pay to the receiving parent while giving the paying parent a greater tax deduction. State guidelines regarding child support are now common and make this kind of manipulation hard if it deviates from the standard calculation.
Apart from claiming a child as a dependent on your taxes, there are other possible tax breaks for parents. The child tax credit is available if you make less than $75,000 as a head of household or below $110,000 for married couples filing jointly. You can claim a tax credit of up to $1000 per child if certain guidelines are met. There are also childcare credits you can claim and this can make a big difference if you need childcare to either look for a job or work after the divorce.
If you have any questions about the tax implications of child support or other elements of your divorce, consult with an experienced family law attorney to ensure you take the right steps to protecting your rights to any tax breaks.
Are you in the Los Angeles County area and have questions about child support and the tax implications of your divorce? Attorney Mark H. Karney can help you identify any tax breaks you may be qualified for and can ensure you the best possible financial outcome from for your divorce. A Certified Family Law Specialist, Mark H. Karney has experience handling complex and high-asset divorces in Los Angeles and surrounding areas. Contact our office at 310-564-5710; email us at intake@cfli.com or contact us through our online form to schedule a free consultation today.