Is Child Support Tax Deductible? No, and Here’s Why.

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We often get asked is child support tax deductible, in other words is child support deductible on taxes? We also get asked can you claim taxes on child support. The answer to all of these is “no”, you can’t deduct child support paid from your gross income, nor does someone have to claim child support as income. Here’s a plain English explanation as to why.

We recently heard from someone who asked “Child support is based on gross income and then the age of children and number of children. Right? Well then a dollar amount gets attached and awarded by the courts. Right? Then that same money is paid to the custodial parent on a weekly or monthly schedule. So why isn’t that child support tax deductible to the payer? It only makes sense that child support being based on gross income would be deducted from that income for tax purposes. Why is it taxable for a noncustodial parent and non-taxable to a custodial parent? I am so confused.”

Well, we don’t blame people from being confused; in fact it’s one of the number one things that confuses single parents, custodial and non-custodial alike. And many people share our reader’s view that it is unfair that paying child support provides no tax benefit to the noncustodial parent, while the custodial parent garners the benefit of untaxed “income”. However, when looked at from the perspective of the tax agencies, it makes a bit more sense, even though it doesn’t make things feel any better.

Whenever there is a taxable event on one side of a giving/receiving equation, there must be an equal off-setting event on the other side of the equation. That is one of the reasons that a business expense will almost always incur a taxable event (such as income) for the party who received the business expense funds. For example, when you purchase office supplies for $100.00, which is a tax-deductible business expense, the office supply store from whom you purchased those supplies will experience a $100.00 increase in taxable income.

This can be expressed by this formula:


 

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{The IRS giveth = the IRS taketh away}

You can see this play out in an area closely related to child support – that of spousal support, which is sometimes still known as ‘alimony’. Here the amounts paid by the paying ex-spouse are tax deductible, and they must also be declared as income by the receiving spouse.

Some states still allow courts to order something called “family support”. This was an effort to give a greater tax advantage to the noncustodial parent, by combining spousal support and child support into one lump sum which was slightly more than the amounts would have been separately, calling it “family support”, and making the whole thing tax deductible. Don’t do this! The IRS has been known to audit the expense, and disallow a portion of the deduction equal to the amount that should have properly been ordered as ‘child support’. This leaves the payor having paid more, but still only getting the lesser tax benefit, not to mention the expense of paying for a accountant, enrolled agent, or tax attorney to advocate for you during the audit.

Another, public policy-related reason that child support does not incur a taxable event is because in theory child support is supposed to be “for the child”, and to go to the necessities required in providing for the child: food, clothing, and shelter. This is why things like the cost of child care are added on top of the base amount of child support. When married, the view goes, you were unable to deduct the cost of buying your children clothing, and it’s no different now that you are no longer living in the same house.

Finally, and as an aside, the child support formulas of nearly all states take into account only: the gross income of both parties, the number of children, and the amount of time the children are with each parent. Rarely, if ever, do they take into account the age of the children, other than to discontinue the child support when the child turns 18 (in some states child support continues until the child either graduates from high school or turns 19, whichever comes first, and in some child support agreements child support will continue while the ‘child’ is in college).

The bottom line is that child support is not, and is never likely to be, tax deductible, nor must it be claimed as taxable income.

child support agreement legal document

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4 thoughts on “Is Child Support Tax Deductible? No, and Here’s Why.

  1. Hi There,

    My opinion is a noncustodial parent should get some type of tax break.
    we pay ungodly amounts in support and still have to supply all those same
    things at my house, and only custodial parents can claim them on their taxes,
    I think it should alternate with holidays each year, Take turns is only fair.

    Tony Tullis .Texas

  2. My states ‘child support’ guidelines say that the purpose of ‘child support’ is to provide a specific lifestyle to the children (and by inference, the custodial parent, and in many cases, their …paramour).

    The same ‘child support’ guidelines also state that if the ‘child support’ payment is more than the money needed to pay for the children’s care and maintenance, that the remaining funds are a ‘gift to the children’.

    My ex-wife is also voluntarily unemployed, but the courts choose to allow her to use what is labeled as ‘child support’ to support both herself and our children because labeling the transfer payment as ‘child support’ increases the gross amount of ‘child support’ collected, which then increases the kickbacks that states receive under the Child Support Performance and Incentive Act for collecting ‘child support’.

  3. Typical bullshit answer to a great question. There should be no custodial parents except in cases where one parent exhibits the inability to be a reliable parent…. IE drug use or violence.

  4. I feel that if child support was tax deductible, you’d have less issues collecting it and less financial strain on both custodial and non-custodial parents. Thus, causing less damaging effects on the children.

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