With tax season winding down, many who are still preparing returns are looking at taking every deduction and credit legally possible in order to minimize their tax liability. Those who are divorced may wonder about their situation and what tax benefits are available to them. Specifically, individuals paying child support may hope their payments are tax-deductible, thereby lessening the tax burden.
Child Support Payments
Unfortunately for those paying child support, the IRS does not allow deductions of those payments from their income. Support payments are also not taxable income for the recipient.
The reason for this can be explained in an example. Say, for instance, that an individual decided to buy his/her child a gift at the mall. The giving of that gift is not written off on his/her individual income tax return, and the gift itself is not considered taxable income on the part of the recipient. The IRS views child support payments in a similar light.
Are There Deductions Available At All?
Depending on the custody agreement, it is possible that one may be able to claim the child as a dependent. However, this arrangement depends on who is the custodial parent. The IRS allows one parent to claim the child in question as a dependent on a tax return, but they assume that the parent will be the custodial parent. If the non-custodial parent wishes to claim the child on his/her return, then the custodial parent will have to give written permission to be passed along with the non-custodial parent’s tax return.
In addition, the IRS allows alimony payments to be deducted by both the payer and recipient, but this only applies to divorces that occurred on or before December 31, 2018. Anyone who divorced after this date is not allowed to deduct alimony payments.
If you are concerned about your child support amounts and want to seek a lower payment amount, the team at Law Offices Of Mark M. Childress can help you understand your options.
Call our team at (817) 497-8148 to speak with an expert about your situation.