When you receive child support payments or send them, you may be wondering if they are treated like any other expense or income. Does the IRS or state treasury have any interest in the payments you give to or get from your spouse? The answer is generally no, but having kids and being divorced can affect your taxes in other ways. Our Morris County, NJ child custody attorneys can tell you more.
Can I Write Off Child Support Payments?
If you are the one making child support payments, you may be wondering if those get deducted from your taxable income. They do not. If you make $60,000 per year and pay child support, your income is still $60,000. You do not get to take those monthly payments and lower your total taxable income. So if you were hoping that being ordered to pay child support would at least help you come tax time, you will be a bit disappointed.
Are Child Support Payments Counted as Income?
At the same time, child support payments are not taxable income for the parent receiving them. You do not have to report these payments as income on your taxes and you don’t have to worry that you’ll owe extra in taxes at the end of the year.
Child support payments are not counted as your income because that’s not really their purpose. This money is meant to go directly towards the needs of your children. You should be spending this on food, clothing, medicine, and anything else that they need. It’s not seen as income and you won’t have to stress about a potential tax bill later on.
Are There Other Ways That Having Children Can Affect My Taxes?
So you don’t have to report child support payments as income and you cannot write them off, but your children can affect your tax bill in other ways. What really makes a difference is claiming a child as a dependent.
Not to get too much into the weeds here, but what you need to know is that having dependents can affect your tax bill and what kinds of credits you can qualify for. It’s also important to know that two divorced parents cannot claim the same child as their dependent. You and your former spouse need to coordinate on this or you will end up getting visited by the IRS.
Schedule Your Consultation With Our Legal Team
If you are going through a divorce and you need help negotiating a fair child support arrangement, contact Townsend, Tomaio & Newmark, L.L.C. to schedule a consultation. Our experienced family lawyers would be happy to tell you more about what we can do to be of assistance.
