Is Child Support Tax Deductible?

If you are divorced and have a child with your ex-spouse, you are legally obligated to financially support that child, whether you are involved in their life or not. So, does the amount of child support given or received have any effect on filing your tax returns?

Child support payments usually come from the noncustodial parent. This money is to help with everyday costs associated with raising a child, including helping with housing, groceries, education, and any other necessities the child may require. Even though the noncustodial parent is the one sending the support check, that person cannot tell the custodial parent how to spend the money. A new tax law, beginning in January 2019, states that the custodial parent does not have to claim child support as income and the noncustodial parent cannot claim child or spousal support as a deduction for tax purposes.

Which Parent Can Claim Their Child as a Dependent?
Raising a child is expensive so the IRS allows a tax credit when claiming the child as a dependent. It is clear when the parents are living together and married; however, when the child only lives with one parent but the other parent is still providing the support, it gets confusing as to who gets to claim the child as a dependent on tax returns. 

The IRS rules for claiming a child as a dependent by a parent are as follows:

  • The child must have lived with you for the last half of the tax year
  • The child must be under 17 years of age at the end of the tax year
  • The parent claiming the deduction must provide at least fifty percent of the financial support for the child

IRS Exceptions
Noncustodial parents have a hard time claiming the deduction if the child lives with the other parent for most of the year, even though the noncustodial parent provides financial support for the child. This issue is usually addressed with a court order during the divorce, stating which parent, if not both, can take the deduction. Usually, when both parents are providing support, the parents will alternate claiming the deduction, each taking an alternate year. If the noncustodial parent is claiming the dependent as a tax deduction, the IRS requires a release form to be signed by the custodial parent and attached to the noncustodial parent’s tax return. 

Parents Unmarried or Still Living Together
If the parents were never married or lived together in the same home for the last half of the tax year, the parent who provided more than half of the support for the child can claim the deduction as a dependent.

Are There Any Other Child-Related Expenses that Can Be Deducted?
There are IRS deductions available for healthcare, college, and childcare expenses if the financial requirements are met. The deductions will only cover a portion of the expenses.

Delinquent Child Support Payments
The IRS will take money from a parent’s tax refund and pass it along to the agency that handles child support payments if that parent has fallen behind in paying support. An experienced family law attorney, like a child support lawyer in Arlington, TX, can answer any questions about tax issues relating to child support. 

Thanks to Brandy Austin Law Firm, PLLC for their insight into whether or not child support is tax deductible.