Child Support and Taxes in a California DivorceChild Support and Taxes FAQ
How Much is "Too Much" Support?
Divorced or Separated Individuals - Taxes
What you need to know about your taxes if you pay or receive child support.
- Is child support taxable for the recipient, or deductible for the payer?
- My ex-wife and I have one child. My wife has custody and I pay child support. Can we both claim her as a dependent?
Is child support taxable for the recipient, or deductible for the payer?
For federal income tax purposes, child support is tax-free to the recipient but not deductible by the payer. On the other hand, an alimony payer may deduct payments made pursuant to a court order or written agreement while a recipient must report them as income.
In the past, when ex-spouses had more flexibility in negotiating the amount of child support and alimony, many ex-spouses agreed to greater alimony and less child support because of the resulting tax advantage to the payer. Because all states determine the basic child support obligation by formula, however, shifting the amounts of child support and alimony to take advantage of tax deductions is increasingly difficult.(back to top)
My ex-wife and I have one child. My wife has custody and I pay child support. Can we both claim her as a dependent?
Divorced parents, unmarried parents and married parents who file separately (this includes separated but not yet divorced parents) cannot both claim the same children as tax exemptions. The IRS may audit both returns if it discovers this error on one parent's return.
In the absence of a written agreement, the general IRS rule is that the parent who has the children for the longest part of the year is entitled to the exemption. (26 U.S.C. Section 152.) This usually means the mother because she most often gets primary physical custody.
But if the father furnishes over 50% of the child's support, he is entitled to the exemption. He must file with his tax return IRS Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, signed by the mother. If the father claims the exemption without filing this form, he may have to prove that he furnished over 50% of the support for the kids if the IRS questions his return.(back to top)