Every year, millions of U.S. taxpayers must file their taxes with the IRS and make sure they are in compliance with all applicable tax laws. One question many taxpayers have is whether child support received is taxable income on their federal tax return.
In most cases, child support payments are not considered to be taxable income. The Internal Revenue Service (IRS) states that any payment received specifically for the support of a child is not subject to taxation. Child support is intended to provide for the child’s basic needs, such as food and shelter, so it is not reported on a tax return. Generally speaking, income tax is paid on money earned. Child support is money received on behalf of children and not “earned.” Therefore, it’s not technically earned income that’s subject to income tax.
In addition to being non-taxable income for the recipient, child support payments are also non-deductible expenses for the payer. This means that if you make child support payments each month, you cannot deduct those payments from your taxes at the end of the year. The only exception to this rule is if both parties agree that some portion of the payment should be designated as maintenance (also known as alimony or spousal support), in which case it would be subject to different tax rules.
If a court order has designated a portion of the payment as maintenance, then special attention must be given. In some situations, maintenance orders issued before December 31, 2018, are considered to be taxable income. It is important to specifically understand what amount is classified as maintenance and what should be considered child support. If a court order does not make this distinction clear, it could result in confusion and potential problems with taxation down the line.
As with almost all issues pertaining to taxes, there are always exceptions. Although child support payments are not taxable income under federal law, recipients should always consult with a qualified tax professional before filing their tax return, as there may be specific regulations regarding taxation at the state level. Additionally, all taxpayers should keep detailed records of any income received throughout the year.
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