Is Child Support Tax Deductible?
When you’re responsible for paying child support, you might wonder if you can claim the payments as a deduction on your tax return. Although child support payments can’t be claimed as a tax deduction, it doesn’t mean that child support payments — or failing to make them — can’t impact your tax refund. To find out more about child support taxes and file your tax return correctly, learn more about reporting child support income and payments on your taxes.
Is Child Support Deductible?
Child support is not considered taxable income. The Internal Revenue Service deems child support payments exempt from income taxes, so you don’t report child support payments on your tax return. Additionally, when you pay child support to your ex-spouse, you can’t deduct those payments on your income taxes — no matter the amount.
Child Support and Taxes
Although child support payments don’t affect your taxable income, they can impact your tax bill by affecting which parent can claim the dependent children. You might be able to claim a child as your dependent if your situation meets certain requirements.
Generally, the parent with whom the child lived for the majority of the year — referred to as the custodial parent — is allowed to claim the child as a dependent on their income tax return for that year.
Is Child Support Tax Deductible for 2020 Due to the Tax Cuts and Jobs Act?
Although the Tax Cuts and Jobs Act eliminated all personal exemptions for 2018 through 2025 — which includes exemptions for dependents — you still might be able to reduce your tax liability. You can apply the child and dependent care credit to your tax return if you paid expenses for the care of your dependent so that you (and your spouse, if filing jointly) can work or actively look for work, according to the IRS. This allows you to receive up to $3,000 for one dependent or up to $6,000 for two or more dependents.
However, the child and dependent care tax credit is not available for couples whose filing status is married filing separately. You might be able to claim the child tax credit, which gives you a tax credit of $2,000 per qualifying child.
To avoid complications and future arguments, you should include terms in your divorce decree regarding which parent can claim the dependency exemption for a child each year, especially when neither parent is the sole custodial parent. For parents who don’t have an agreement and their child lived with each of them for an equal amount of time during the year, the IRS tiebreaker rules allow the parent with the higher adjusted gross income to claim the child.
Related: 8 Best Tax Tips for Single Parents
Tax Refund Offsets
Child support can make taxes for divorced parents difficult to navigate if one spouse doesn’t complete their payments. For example, failing to pay required child support can result in the loss of your tax refund. Under the Treasury Offset Program, the Bureau of Fiscal Services can withhold all or a portion of your refund to pay past-due child support. When this happens, you will receive a notice from the Bureau of Fiscal Services stating the original refund amount, the amount withheld, the agency receiving the withheld amount and how to contact the agency.
Additionally, married people who file a joint return and fail to receive a tax refund due to their spouse’s unpaid child support obligations can file Form 8379 to request a portion of the refund back from the IRS.
Find Out: Everything You Need To Know About Taxes
Is Alimony Tax Deductible?
Unlike child support, you can deduct spousal support payments that you make to your ex-spouse based on your divorce decree. The payments should be reported as alimony on your Form 1040. The Social Security number of your former spouse who is receiving the payments must be included on the return, or the deduction might be canceled in addition to a possible $50 penalty.
When you receive alimony payments, you must also include those amounts as part of your taxable income.
Calculating your income taxes and child support tax refund each year can be complicated, especially for divorced parents who have multiple children, so it’s best to get advice from a tax expert to achieve the best financial outcome for your family.
If you’re concerned about what you need to know this tax season, find out how taxes have changed for divorced parents.
More on Tax Deductions
- Take Advantage of These 16 Commonly Missed Tax Deductions
- The New Rules for Claiming Your Boyfriend or Girlfriend on Your Taxes
- Every Tax Write-Off You Don’t Know About
- Watch: How to Legally Cheat Your Tax Bracket
Last update: Feb. 23, 2021