Child Support and Taxes

What you need to know about your taxes if you pay or receive child support.

For federal income tax purposes, child support is tax-free to the recipient, meaning neither the ex-spouse nor the child owes taxes on it. However, child support payments are not tax-deductible by the parent who makes the payments — unlike spousal support payments. (Spousal support is tax-deductible for the person who makes the payments and taxable to the recipient.)

Be careful how support is characterized in your marital settlement agreement, as it may have significant tax consequences.

What Qualifies as Child Support?

In order to qualify as child support, the payments received by an ex-spouse must be designated as child support in the divorce or separation agreement. If the agreement lumps the payments together as "family support" or "alimony," or doesn’t otherwise designate a specific portion of each payment as child support, none of the payment will be considered child support for tax purposes.

This can have adverse tax consequences for the recipient of child support payments, because family support or alimony is taxable to the recipient. So instead of receiving nontaxable child support, the ex-spouse will be receiving alimony, which is taxable to the payee, regardless of what the payee actually uses the money for.

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Paternity Issues and Child Support

Paternity must usually be established before child support can be collected.

The question "Who is the father?" is not as simple a question as you might think. There are important legal distinctions between different situations relating to paternity.

When Paternity Is Agreed On or Presumed

Acknowledged father. An acknowledged father is a biological father of a child born to unmarried parents for whom paternity has been established by either the admission of the father or the agreement of the parents. An acknowledged father must pay child support.

Presumed father. If any of the following are true, a man is presumed to be the father of a child, unless he or the mother proves otherwise to a court:

  • The man was married to the mother when the child was conceived or born, although some states do not consider a man to be a presumed father if the couple has separated.
  • The man attempted to marry the mother (even if the marriage was not valid) and the child was conceived or born during the "marriage."
  • The man married the mother after the birth and agreed either to have his name on the birth certificate or to support the child.
  • The man welcomed the child into his home and openly held the child out as his own.

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