Is Child Support Tax Deductible?

Child Support Isn't Tax Deductible

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The person paying child support cannot deduct those payments on a tax return.

Child support is not included in the income of the person receiving those payments.

As the IRS phrases, "Child support payments are not deductible by the payer and are not taxable to the payee," (Publication 504, Divorced or Separated Individuals). Furthermore, "When you calculate your gross income to see if you are required to file a tax return, do not include child support payments received," the IRS writes in one of their frequently asked questions.

Why Not? 

Two tax laws function together to determine the tax treatment of child support. On the one hand, it is plausible to suspect that child support might be taxable income since we have a tax rule that says "gross income means all income from whatever source derived." But there's an important qualifier. The full rule, with the exception, reads like this: "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived," (Internal Revenue Code section 61(a), Legal Information Institute).

And that brings us to the second rule at play here. For elsewhere in the same subtitle A of the Internal Revenue Code, we find section 71, which deals with alimony and separate maintenance payments. At first blush this might not seem to be related to child support. But look at how this tax rule gets constructed. "Gross income includes amounts received as alimony or separate maintenance payments," it reads in section 71(a).

And that fits in perfectly with the general rule of section 61(a). But section 71 goes on to provide an exception for child support: "Subsection (a) shall not apply to that part of any payment which the terms of the divorce or separation instrument fix (in terms of an amount of money or a part of the payment) as a sum which is payable for the support of children of the payor spouse," (section 71(c)).

In other words, child support is not included in the gross income of the person receiving the funds.

And since the person paying can only deduct amounts that qualify as alimony, and since child support is not considered alimony, then the person paying the child support cannot deduct those child support payments as alimony or as part of any other tax deduction. (Internal Revenue Code section 215.)

What Makes a Payment Child Support and Not Alimony?

"To qualify as child support, payments must be designated as 'child support' in a divorce or separation agreement," writes attorney Lina Guillen (Child Support and Taxes, Nolo.com).

Child Support in Arrears

The Treasury Department will re-direct federal tax refunds from people who are behind on their child support payments. Under the Treasury Offset Program, the government pays out the tax refund money to the state's child support agency, and they in turn make sure the funds get to the child. This program is authorized by Internal Revenue Code section 6402(c). (See also the Treasury Regulations section 301.3402-5.)

NOTE: Tax laws change periodically, and you should consult with a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and is not a substitute for tax advice.