Can You Claim Child Support Payments On Your Taxes
Can you claim child support payments on your taxes is a common question among parents who are caught in the bind of a divorce or separation situation after the break up of a relationship and where there is a child or children involved.
In short, the answer is no you can not claim child support payments on your taxes as child support is deemed to be “tax neutral” which means the donor spouse can not write if off in their income tax return and the recipient spouse is not taxed on the income.
Child Support and Spousal Support
You need to be aware that there is a significant difference in the tax treatment between child support and spousal support. As pointed out already child support is tax neutral but spousal support is not and is taxable in the hands of the recipient and is tax deductible in the hands of the donor.
So be careful how any support payments in any agreement or settlement in relation to marriage or divorce or child custody is characterized as the tax consequences are quite different as can be seen from the above. For example it the totality of the support being provided is described as “alimony” or “family support” in any agreement, then none of the payment will be considered as child support. This is fine for the donor who can write it off against taxes but is fully taxable in the hands of the recipient.
A Dependent Child
A dependent child is one for whom you provide in excess of 50% of the child’s support in any tax year; this is critical as there is a dependent exemption provided by the IRS and this is granted to the parent who pays more than 50% of the child’s expenses in a tax year. This is generally the parent with whom the child lives for more than half the year. The parents can negotiate who gets the exemption between them and can alternate it from year to year as to who gets it but the IRS won’t allow parents to split it in a tax year between them.
So even though you may be paying child support and would expect to get the exemption re the dependent child, the law generally gives the exemption to the parent with whom the child spends more than half of the year who is generally the custodial parent. You can trade the exemption by filing a IRS Form 8332 with the IRS and you might want to do this to ensure that the exemption is used by the parent with the most income and for whom it is most financially beneficial.
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Filed under Child Support Calculator by Terry
