Is Child Support Tax Deductible?
If you’re responsible for paying child support to an ex-spouse, you may wonder if the money you pay is tax deductible. The Internal Revenue Service (IRS) does not allow you to deduct your child support payments from your taxes. The IRS considers the child support you pay as money you’re contributing directly to your child’s needs.
While you may feel it’s unfair that the IRS doesn’t allow you to claim child support as a deduction on your taxes, it makes sense if you consider the expenses you’re responsible for as a parent. You don’t expect the money you spend on your child’s clothing or food to be tax deductible.
You provide child support to your ex-spouse so they can pay for these child care expenses. Therefore, the money you pay in child support should be thought of as money for clothing, food, and other needs your child has. While you may be able to claim other deductions or credits on your tax return, you cannot claim child support.
How Does Child Support Work?
If you and your spouse have a child together and get divorced, the court may order you to pay child support. The amount of child support you’re required to pay depends on your income and the expenses your ex-spouse claims they need assistance covering.
You’re required to pay monthly child support payments directly to your spouse. They can use this money for child care expenses however they see fit. Your child support money may be used for:
- Medical expenses;
- Recreational activities.
Your ex-spouse uses your child support money for expenses related to your child that you would have been responsible for as a couple if you remained married. Since you’re providing the money for these child care expenses directly to your ex-spouse, these payments aren’t tax-dedutible when you file your taxes with the IRS.
Does Your Ex Claim Child Support As Income?
Since you’re required to report all income you receive throughout the year to the IRS when you pay federal income taxes, you may assume your ex-spouse must report the child support payments you made. However, your ex-spouse is not required to claim your child support payments on their tax return. Although the child support money you pay is used for child care expenses, your child is not required to claim this money as income on their tax return either.
When your ex-spouse calculates gross income to file their tax return, they’re not required to add in the child support payments you made, regardless of how the money was used. However, your ex-spouse must claim all other sources of income, including income they received through a job or investment income.
Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. With this legislation in place, the alimony tax deductions are eliminated for both parties. Originally, alimony was tax deductible for the spouse who was responsible for paying it. The spouse receiving this alimony was required to claim it as income on their tax return.
However, with TCJA in place, spouses who were involved in divorces that were finalized on January 1, 2019 or later are no longer responsible for claiming this alimony as income. Spouses who pay this alimony can no longer claim tax deductions on these payments.
If your divorce decree was issued in 2018 or earlier, the alimony you pay may still be tax deductible. Your spouse may also be required to claim the alimony as income on their taxes. However, the alimony that’s susceptible to these federal taxes does not include child support you paid throughout this time.
To be considered alimony, the payments, you, and your ex-spouse must meet certain IRS requirements. For example, you cannot file taxes jointly or live in the same household to claim tax deductions on alimony payments. The TCJA may expire in 2025 unless additional legislation is passed to uphold this tax law.
Your alimony payments may be tax deductible if you meet specific requirements. However, your child support payments are not tax deductible. Your ex-spouse is also not required to claim these payments as income. By reviewing tax laws as they relate to alimony and child support, you’ll better understand how to correctly file your taxes. If you’re in a hurry to receive your tax refund, filing your taxes properly is the best way to ensure your refund is processed quickly.
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