Law & Legal & Attorney Tax Law

Federal Income Tax & Child Support

    Deducting Child Support Payments

    • Child support payments are not tax deductible. This is not just limited to payments the noncustodial parent makes to her former spouse per an Order for Child Support, but also includes any payments she makes directly for the benefit of the child. Purchasing clothes, school tuition and supplies, food and other necessities for the child, payments made towards a health insurance or a life insurance policy and payments made towards fees for sports and other extracurricular activities are all considered child support and therefore are not deductible.

    Claiming Child Support Payments

    • The custodial parent does not pay taxes on child support payments received. Child support payments do not count towards the custodial parent's total taxable income and do not need to be disclosed on Form 1040.

    Claiming Dependents

    • Only one parent may claim a minor child as a dependent on a federal income tax return. Most family courts grant the parent with primary physical custody the right to claim all minor children as dependents. If a noncustodial parent attempts to claim a minor child as a dependent when the custodial parent already has, his tax return will likely be rejected for filing, and he may be subject to an audit by the IRS.

    Child Tax Credit

    • As with dependents, only one parent is eligible to claim the child tax credit in any given tax year. As a general rule, the parent who claims the children as dependents is the parent who can claim the child tax credit. Typically, this parent retains primary custody. If you are making support payments to your former spouse, you are likely ineligible to claim the child tax credit.

    Arrearages

    • A common method of enforcing a child support order is by garnishing income tax refunds. If a noncustodial parent is behind on his child support payments, the IRS can intercept a federal tax refund and submit it directly to the state's child enforcement agency. The child support agency then applies the amount of the income tax refund to the back-owed child support. If the amount of the refund is more than the amount of the back-owed child support, the noncustodial parent will receive the difference.

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