Child Support and Taxes Q&A
By FindLaw Staff | Legally reviewed by Hal Armstrong, Esq | Last reviewed December 07, 2021
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The subject area of child support is a volatile one, but when you add tax implications, the combination becomes complex. A cornerstone of state child support guidelines is that the support is "income driven" which means it is determined primarily by the income of the parties. Thus, it's vital that parents understand what funds can be considered "income" under the child support guidelines. This article answers some commonly asked questions about the relationship between child support and taxes.
Q: My ex-spouse is delinquent in paying child support. The attorney general has filed some sort of paperwork with the IRS to withhold my ex-spouse's tax refund. How would I receive the withheld refund?
A: The answer is different for each state. You need to contact the U.S. Department of Health and Human Services Administration for Children & Families Office of Child Support Enforcement for state-specific information.
Is there any way to find out if I need to file an injured spouse claim before I file a return?
A: Your spouse can ask the agency that might be claiming the refund for a past-due debt. Another source of information is the U.S. Treasury's Offset Program Call Center at (800) 304-3107.
Q: Can I file my return electronically even though I am filing a Form 8379, Injured Spouse Claim and Allocation?
A: Yes, you can file electronically.
Q: If two single people (never married) have a child and live together, providing equal support for that child, can they both claim head of household status?
A: Only the person who paid more than half the cost of keeping up a home for the year would qualify for the head of household filing status. If both people paid exactly the same amount, neither would qualify for the head of household filing status.
Q: My husband and I have provided a home for my sister and her son for the past 7 months. She receives no child support from her ex-spouse, and she doesn't work or have any income of her own. Can I claim her and her son as dependents?
A: Your sister and her son need to qualify as dependents for you to claim them on your taxes. There are 4 tests that must be met for someone to be a qualifying relative:
- Not a qualifying child test
- Member of household or relationship test
- Gross income test
- Support test
If your sister's son is not the qualifying child of any other taxpayer, that would pass the "not qualifying child test." Under the member of household or relationship test, your sister and her son did not live with you all year, so they must qualify as relatives who don't live with you. A sister and a son or daughter of a sister qualify as relatives under this test.
Your sister appears to meet the gross income test because she does not have any income, which is under the threshold. If you provide more than half of your sister and her son's total support during the calendar year, it appears they pass the support test. In this situation, your sister and her son would likely qualify as qualifying relatives.
For more information, see IRS Publication 501, Dependents, Standard Deduction, and Filing Information.
Q: If you pay child support, are you allowed to deduct anything on your taxes or claim the child as an exemption?
A: Nothing can be deducted for the child support payments. Child support payments are neither deductible by the payer nor taxable income to the payee. You may be able to claim the child as a dependent. Generally, the custodial parent is treated as the parent who provided more than half of the child's support.
However, the noncustodial parent may be treated as the parent who provided more than half of the child's support. Many agreements include a provision that when there is an even number of children, each parent declares half the children as dependents. For odd number children, the parents alternate years claiming the child.
In this situation, the IRS may require parents sign a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a substantially similar statement.
Q: Are child support payments considered taxable income?
A: No, child support payments aren't considered taxable income, according to the IRS. Child support payments are neither deductible by the payer nor taxable to the payee. So when you calculate your gross income to see if you are required to file a tax return, don't include child support payments received.
Q: Is child support considered income when calculating the Earned Income Credit?
A: No, for purposes of calculating the Earned Income Credit, child support is not considered earned income.
More Questions about Child Support and Taxes? An Attorney can Provide Answers
Child support and taxes are each intimidating subject areas individually. Together, they can present challenging issues and harsh penalties may apply if you fail to present your case properly. Don't go it alone, call an experienced child support attorney to help ensure that you make it through the process with as few complications as possible.
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Contact a qualified child support attorney to make sure your rights are protected.