Going from single to married to divorced is sure to affect your taxes, so it makes sense that many newly divorced people have questions about how their status will affect them come tax time. This is especially relevant for those who will be receiving some kind of payment from their former spouse as a part of the divorce agreement. One question we hear often is “Will my child support be taxable?” Our Morris County, NJ child support attorneys can tell you what you need to know.
Does Child Support Count as Taxable Income?
The main takeaway is that child support does not count as taxable income. If you get a check from your spouse for $1,000, it’s not like a paycheck. There are not supposed to be deductions for taxes and you don’t have to worry that you will be taxed on it when you file in April.
This is because the state does not see child support as income. This is not money for you. It’s meant to fulfill the needs of your children. The child support sent to you by your spouse should be spent on food, school supplies, and clothing for your kids. It’s not extra income for you so it’s not taxed.
Can Child Support Be Deducted On Taxes?
What if you are paying child support though? Can it be written off on your taxes? Only if you want to run into trouble with the IRS. Your child support payments cannot be written off to lower your taxable income.
Here’s an example. You make $100,000 per year and pay $25,000 in child support. If these payments could be written off, your taxable income would be $75,000. That’s not how things work though, so you would be taxed on your full earnings. Do not go into tax season expecting some kind of big break because you pay child support. You will be disappointed.
Who Claims the Child as a Dependent?
There are some ways that your children can affect your taxes though. When you file your taxes each year, you can claim dependents. If you have three children, you can tell the government that you have three dependents. Having dependent children can qualify you for certain tax breaks and affect your return in other ways.
When you are divorced, you have to be careful about who claims the children as dependents. If you both claim them, the IRS is going to notice eventually. If you don’t want to deal with that hassle, coordinate with your former spouse. Some couples have one person claim the kids each year. Others claim one child while their spouse claims another. You just have to be on the same page.
Talk to Our Family Lawyers
If you have questions about your child support arrangement, contact Townsend, Tomaio & Newmark. We can help you address any problems with your ex or other matters related to support. Schedule your consultation today.
