Divorce changes many things, but especially how you do your taxes. One of the most common questions we receive as divorce and family lawyers in San Antonio is: can you write off child support payments on your taxes? The government allows individuals to write off numerous types of expenses, and it’s reasonable to ask whether child support payments are one of them.
You Cannot Deduct Child Support Payments From Taxes
Unfortunately, child support payments are generally not tax-deductible, meaning you cannot deduct them to decrease your taxable burden. Some people think that if you pay over a certain amount of child support, then payments are tax deductible. This is not true, though; you will have to pay taxes on the full child support payments.
Child support payments are usually not tax deductible because they are for personal expenses. The custodial parent uses the payments for things like clothing and food. If the non-custodial parent bought those things for the child, they couldn’t then deduct those expenses from their taxes. So, any money the non-custodial parent gives the custodial parent in child support payments is similarly not tax-deductible.
Exceptions to Child Support Tax Deduction Rules
Most child support payments are not tax-deductible for the person paying, but Texas has a small handful of exceptions. For example, if you are making child support payments to a parent who lives in a household that uses SNAP benefits, you may be able to deduct some of those payments from your taxes. You can find a full list of allowable deductions on the Texas Health and Human Services’s website.
The rules surrounding these types of deductions are complex and may not apply in every case. A family law attorney can provide legal advice and determine whether you are eligible for any child support deductions.
Do I Have to Pay Taxes on Child Support Payments I Receive?
Conversely, custodial parents who receive child support payments generally do not have to pay any taxes on that money. Texas doesn’t have a state income tax, and the IRS doesn’t count child support payments as taxable income, so you can receive that money completely tax-free. If you are receiving child support payments, you would leave them off your gross income when filing your taxes at the end of the year.
Can Non-Custodial Parents Claim a Child as a Dependent on Taxes?
Most of the time, the custodial parent is the one who can claim the child as a dependent for tax exemptions and the child tax credit (CTC). However, non-custodial parents may be able to claim their child tax exemptions and the CTC if the following four conditions are true:
- The parents are divorced, separated, or have lived apart for the last six consecutive months.
- One or both parents have custody of the child for more than half the year
- The parents provided half of the child’s support that year
- The non-custodial parent provides Form 8332 on their tax return, and the custodial parent signs it.
Note, however, that a non-custodial parent cannot claim the earned income tax credit, even if they qualify for the dependency exemption and child tax credit. If both parents try to claim the child as a dependent on their taxes, the government will go with whoever has primary custody. If both parents have custody, they will look at the parents’ individual incomes to make a decision.
Are Alimony Payments Deductible?
No, alimony payments are not tax deductible for the payer. Alimony payments used to be tax deductible, but the 2017 Tax Cuts and Jobs Act (TCJA) changed how the IRS treats alimony payments. For alimony agreements finalized after December 31, 2018, the payer cannot deduct any alimony payments from their taxes. If your divorce agreement was finalized before December 31, 2018, you can still deduct alimony payments from your taxes.
Will Not Paying Child Support Affect My Taxes?
If you fall behind on your child support statements, the state of Texas will send your name to the Office of Child Support Enforcement (OCSE). The OCSE notifies the IRS about delinquent payers, and the IRS can then use any available federal tax refund to cover the missing payments. So, failing to pay child support doesn’t directly affect your taxes but can have implications for your federal refund.
Family Law & Divorce Attorneys in San Antonio
Divorce can create several complications regarding finances and child custody arrangements. Contact Higdon, Hardy & Zuflacht, L.L.P. online or at (210) 349-9933 to speak to a child support attorney in San Antonio. Our attorney atHigdon, Hardy & Zuflacht, L.L.P. can provide the compassionate and effective legal support you need to navigate difficult circumstances.
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