Those who pay child maintenance on a regular basis, whether once a month or even out of each paycheck, may be curious as to whether or not those payments qualify as a tax deduction. The answer that you will receive from the IRS (Internal Revenue Service) will be “Sorry, no.”
The cost of caring for your children is regarded as a personal expense, regardless of whether or not they are a part of your household or whether or not you pay child support. It is not something that can be deducted from your taxes. On the other hand, becoming a noncustodial parent may qualify you for one or two more prospective tax savings. What follows is a rundown of the information you need to know about how the financial support you give to children can impact your taxes.
Key Takeaways
The parent who is paying child support does not get a tax deduction for their payments, and the parent who is receiving child support does not have to report the money they receive as taxable income. There won’t be any taxes imposed on this occasion.
Even though they may not have primary physical custody of their children, noncustodial parents are still eligible to claim a deduction for the medical expenditures they pay for their children or child. However, this deduction must be itemized and is subject to stringent regulations.
In certain circumstances, you could qualify for the Child Tax Credit and receive a tax refund as a result.
The government has the authority to confiscate any tax refund you are entitled to in order to satisfy any arrears or arrears in child support payments that you are responsible for paying.
Why Doesn’t Tax Deductibility Apply to Child Support Payments?
It is not a tax-deductible expense if you take your kid shopping for new shoes in the mall, even if it is for their own benefit. The Internal Revenue Service has the same attitude on payments made for child support. The money will, in all likelihood, be used to purchase shoes or something else of a similar nature, and this will occur regardless of whether you’re bringing your child to the shopping mall or whether your ex takes your child to the mall.
Note
It makes no difference if the contributions are made to cover your child’s housing, clothes, or any other personal support needs; none of them can be deducted from your taxes.
Does Your Former Spouse Have an Obligation to File Income Taxes on the Money?
Your ex is not obligated to count the child support payments that they make toward their income either. Your child is not required to disclose it as income, just like they are not required to submit the money they receive to the Internal Revenue Service (IRS).
The Internal Revenue Service (IRS) has made it abundantly clear that alimony and child support payments do not qualify for tax deductions under any circumstances, neither for the payer nor the payee. Even if they name their child as a dependent on their taxes, custodial parents shouldn’t count child support payments they get as part of their gross income because this violates the tax code.
It is important to keep in mind that paying child support does not result in any tax liability.
Applying Tax Law
According to Section 61(a) of the Internal Revenue Code (IRC), “gross income” includes all revenue from any source, with the exception of “as otherwise provided.“2 In a statement released in 2016, the Internal Revenue Service (IRS) gave clarification that the “as expressly provided” provision applies exclusively to payments linked to “the support of children.”
How Child Support and Alimony Payments Affect Taxes
Because, in contrast to child support payments, alimony or spousal support payments used to be tax deductible, the Internal Revenue Code establishes a clear distinction between the two types of payments. The individual who was responsible for making alimony payments could deduct these payments against their taxable income, while the one who was on the receiving end of these payments was required to include them when calculating their taxable earnings for tax reasons.
The Tax Cuts and Jobs Act of 2018 (TCJA) removed the tax deduction for alimony beginning with divorce settlements entered in and divorce decrees filed from January 1, 2019, moving forward. This change will apply to all divorces that take place after this date. This provision, in contrast to many other parts of personal taxes modified by the TCJA, does not revert to its previous state after the conclusion of the 2025 tax year. It cannot be recovered under any circumstances.
The deduction for medical costs and related expenses
When it comes to tax deductions, noncustodial parents are not totally left out in the cold by any means. When it comes to the medical expenses that you pay on the behalf of your children, the Internal Revenue Service is happy to provide a tax credit for you.
You can claim a detailed deduction for your child’s health care costs even if they do not live with you as long as you personally paid the insurance company or health care provider, the kid lived with you or your ex spouse for at least half of the year, they are related to you, and both you and your ex paid for over fifty percent of their living expenses during the fiscal year in question.
Unfortuitously, in order to claim this deduction, you will need to itemize, and doing so will require you to forego the standard deduction that is associated with your filing status. That only makes sense if the sum of all of your itemized deductions is going to be greater than the amount of the ordinary deduction that you are allowed to claim for that particular tax year.4 In addition, in order to qualify for a tax deduction for medical expenses, the total amount of such expenses must be greater than 7.5% of your annual adjusted gross income (AGI).
Note
For the tax year 2022, single taxpayers are entitled to a standard deduction of $12,950 (this amount will be used for the return that you will submit in 2023). In the year 2023, it will be increased to a total of $13,850.7 In order for you to get any financial benefit from itemizing your deductions, the sum total of all of your itemized deductions must be greater than these amounts. If you don’t do this, you’ll end up having to pay taxes on a larger amount of money than is necessary.
The Credit for Families with Dependent Children
The Child Tax Credit is another incentive that hasn’t been phased out completely. In the tax year 2022, persons with incomes up to $200,000 are eligible to get a credit of up to $2,000 for each of their children who meet the eligibility requirements.
Noncustodial parents are eligible for this credit if the custodial parent granted them permission to claim their kid or kids as dependents by completing and completing IRS Form 8332. This permission is required for the noncustodial parent to be able to claim their child or siblings as dependents. Children whose parents have never been married, are divorced or separated, or who were never married themselves are subject to a different set of eligibility requirements.
Note
Along with their tax return, the parent who does not have primary custody of the child is required to submit a Form 8332.
Child Support Payments That Are Behind Scheduled Payments
Your child support payments cannot be used to reduce the amount of taxes that you owe; however, any unpaid or overdue child support obligations can result in your tax refund being withheld and applied toward payment of those liabilities. People who are late on their child child support payments will have their federal tax refunds intercepted by the Treasury Department, and the money will instead be sent to the custodial parents who were due to get that support.
The following is a list of frequently asked questions.
What exactly is the procedure for calculating child support?
Child support is the financial assistance that is provided by a parent who does not have primary physical custody of their child to the parent who does. To ensure the noncustodial parents live up to their responsibilities under the law and provide financial support for their children, local and state governments are responsible for enforcing this requirement. A child support arrangement can be made on the parent’s own initiative in most cases, despite the fact that the procedures used by each state agency for calculating child support are slightly different. If the parent with custody files a child support claim for you, the court will begin a procedure to confirm paternity, assess payment responsibilities, and set the conditions of your payment arrangements. If the custodial parent does not file a claim against you, the judge will not begin this process.
Who is responsible for the taxes that are associated with child support?
Both the person making the payment and the person receiving it are exempt from taxation on the amount of the payment that is considered to be child support. Any amount that you give to a third party as child support has already been subject to taxation because it is considered part of your income.
