Is Child Support Taxable?
Getting child support can be a long and arduous process. Winning a case for child support does not get you paid on the spot. You may have to keep working to actually get the money you're owed. That should be the end of the story, but once you do finally receive the money, you may be wondering if it counts as income. Is the IRS including your court-mandated funds in their calculations?
If you have questions about where child support fits into your taxes, DoNotPay can help.
How Support Amounts Are Calculated
Child support payments are generally calculated based on income. Most states provide guidelines for a specific income range, but if your income is below the range, accommodations will be made so that you are not forced into financial hardship. Your payments may also be reduced if you have other children to support.
It is important to remember that the guidelines are only that - a guide. Your payment may vary based on the specifics of your case.
Parents may see higher payments than expected if the case has circumstances that vary from the standard, including;
- A child with special needs requiring extra financial support
- A child with extraordinary educational or healthcare needs
- Assets disproportionately high in comparison with their income
How Payments Are Enforced
- Earned wages
- Disability, social security, and other government benefits
- Tax refunds
- Workers' compensation
- Spousal support
Tax Laws Concerning Child Support
The IRS does not include child support payments received in taxable income. The payee does not pay taxes on them, but the payer cannot deduct the payments from their taxable income and must pay taxes on the payments.
As the payor, you may be eligible for the Child Tax Credit and the Child and Dependent Care Credit to offset the payments if you can claim the child as a dependent. You can claim the child as a dependent if they have lived with you for more than half of the year.
Child Tax Credit
Each child under 17 that you can claim as a dependent could reduce your tax obligation by $1,000. There is no application required for the credit.
Child and Dependent Care Credit
You can claim credit for the care of a child or spouse that you paid for while searching for employment or working. They must meet one of the following criteria:
- A dependent under the age of 13
- Someone who is or would have been your dependent if they had not exceeded the gross income limit or filed a joint return and cannot care for themselves
- A spouse who lived with you more than half the year and is incapable of caring for themselves
- Someone who cannot care for themselves or requires care for their own safety and the safety of others
There is no application for this credit.
Child Support Guidelines by State
If you would like to learn more about the child support laws and payment criteria in your state, DoNotPay can help.
Guides are available for most states.
Get Retroactive Child Support With DoNotPay
A case won is not money in your hand, and the other party may be trying to avoid paying at all. If you have not yet received the funds you are entitled to and aren't sure how to file a demand letter for late child support payments, DoNotPay has you covered in three easy steps:
- Search child support on DoNotPay and enter the details of the person who owes the payments.
- Tell us more about the payment schedule, including the amount and frequency of the payments, the last payment they made, and the number of missed payments, and how much they owe you in total.
- Confirm your contact information and select whether you want us to mail or email the letter on your behalf. Choose how you would like to receive the payment and verify your signature.
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