Tax Tips: Can I Deduct Child Support?

tax tipsBy Jennifer M. Paine

Michigan Divorce Lawyer

The simple answer to the tax question, “can I deduct child support?” is no. And forget about paying alimony, which is deductible, instead of child support.

The IRS can treat payments as child support despite what you call it if the payments are paid out as child support would be – during the child’s minority, in amounts that fluctuate with fluctuating income, childcare needs, etc., and so forth.

However, you might be paying expenses for your children that are deductible.

These include qualifying childcare expenses and certain healthcare expenses for minors, and college tuition and school expenses for adults. Two federal options, which are not often discussed but could be helpful, allow you to deduct up to $8,500 total – the Tuition and Fees Deduction and the American Opportunity Tax Credit.

The Tuition and Fees Deduction allows you to deduct payments you made for yourself or your dependent for tuition and fees that are a condition of enrollment. The total deduction is $4,000 annually for a single filer with an income up to $65,000 ($130,000 for joint filers), $2,000 for a single filer with an income between $65,000 and $80,000 ($130,000 and $160,000 for joint filers), and nothing for those with an income greater than $80,000 (or $160,000 for joint filers). This is one reason to file a joint return if you  were not divorced in 2011.

The American Opportunity Tax Credit is a refundable credit for qualifying undergraduate expenses, such as tuition, books and school supplies. The credit is phased-out for those payors earning more than $80,000, if filing single, or $160,000, if filing joint, but the payor can claim his own expenses or his dependent’s, such as his child’s.

The credit is $1,000 of the first $2,000 in expenses paid, and then an additional 25% of the following $2,000, for a total of $2,500 as a potential credit. However, up to 40% of the entire $4,000 is refundable, too – that is, $1,000 more coming back to you!

Read more Divorce Tax Tips articles:

What Is My Tax Status?

Can I Claim The Dependency Exemption?

Can I Deduct Child Support?

Can I Deduct Alimony or Property Settlement Payments?

Can I Deduct Divorce Attorney Fees?

Note: This information is general in nature and should not be construed as tax advice. You should work with your attorney or tax professional to determine the tax advantages that will work best for your situation.

 

Jennifer M. Paine is a Michigan Divorce Lawyer with Cordell & Cordell. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims.

Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.

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11 comments on “Tax Tips: Can I Deduct Child Support?

    I pay $1,400/mo. and I can afford anything else after weekly taxes are paid. I basically have enough money left over “sometimes” just to get to work the next week. I have lost literally everything; possessions, the ability to see my children daily, or even do things with them when they are with me. She takes them on extravagant vacations twice a year, buys them the top of the line clothes and electronics and even has the audacity to direct the kids to ask me to buy certain things knowing I can’t afford them so that she can tell them that I continually let them down, then buys them what they wanted making her the hero. All of this because I found out she was having a two year affair.

    It is so so so unfair that my ex-wife gets every benefit now even more with the new tax law and I get no deductions when I pay her almost a thousand a month it’s ridiculous she gets all the money and tax benefits and I still pay for clothes and food and everything else and they stay with me a lot I don’t say anything about it because I want to see my kids as much as possible it’s just wrong

    That law needs to be changed it is most certainly income for the receiver and it damn sure comes out of my pocket as a expense therefore a logical deduction from my pay.

    How many dads would it take to change that law ?

    It blows me away ….

    I am so with you. It upsets me more than anything else in life especially when you have two kids and you can’t even split the responsibility on taxes it’s ridiculous. It offends me upsets me to know but what can you do?

    How is this fair to the father that is paying the payments? My take home is 30k less than what I have to report. My taxes don’t change at all.

    IRS Tax
    The vast majority of tax debt relief firms bill 1000s of bucks to solve the debt. For that reason NEVER toss your funds away! If you are planning to employ tax debt assistance, seek information to start with. Just how many individuals were left behind in the cold just after Roni Deutch and JK Harris went down? Get smart with this and look for http://www.Consumertaxreports.org. These folks only review tax debt help businesses and are not reluctant to call out the questionable individuals. Whenever you happen to be in need of specialist tax debt assistance, certainly look into ConsumerTaxReports.Org first and foremost.

    Cordell & Cordell Illinois Divorce Lawyer
    Unallocated family support is a label which can be applied to the combination of child support and maintenance payments which can make all or a portion of the payment deductible by the payor and taxable to the payee.

    However, the specific language of the court order setting the support will determine whether the payments are deductible as alimony. Simply designating the support as “unallocated support” is not sufficient to satisfy the IRS regulations.

    According to the IRS regulations, payments made to a spouse must meet certain requirements to be considered alimony, and therefore be tax deductible to the payor, and taxable to the recipient.

    Additionally, in order to be tax deductible to the payor and taxable to the payee, certain requirements must be met to establish that the payments are not child support.

    Therefore, if all or a portion of the unallocated support payment does not meet the requirements to be considered alimony, or if a portion of the payments are considered child support, that portion of the unallocated support payment may not be deductible to the payor spouse.

    If your court order contains an award of unallocated support payments, you should review the language of the order with a tax professional or attorney to determine whether the payments meet the IRS requirements to be deductible as alimony.

    Note: This information is general in nature and should not be construed as tax advice. You should work with your attorney or tax professional to determine the tax advantages that will work best for your situation.

    What about the use of unallocated support payments? My understanding is that these payments are fully deductible by the paying spouse and fully taxable to the recipient spouse if the divorce decree specifies that the amount being paid is unallocated support. This is in Illinois.

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