Depending on your financial situation and custody arrangement, child support might make up a considerable portion of your income or expenses. If this is the first year the arrangement has been in place, it is natural to worry about its tax implications. Below, a family lawyer from Davidson Hopkins & Alexander explains what you can expect from your 2018 tax return.

Is Child Support Tax Deductible or Taxable?

For the Payer

Unfortunately for those who must make regular child support payments, the arrangement is not tax-deductible. Child support is intended to provide for your kids’ everyday living expenses, and since such expenses were not deductible prior to the divorce, the Internal Revenue Service (IRS) reasons that they should not be deductible after it, either.

For the Recipient

The IRS does not consider child support taxable income. That means, if you are currently receiving payments from your ex, you should not include their total amount in your gross annual income at tax time. When family law judges award child support, they assume 100% of the funds will go toward caring for the children. If these payments were taxable, a considerable portion of them would go to Uncle Sam instead.

Other Tax Implications Worth Considering

Unlike child support, your family lawyer will remind you that alimony payments are both deductible for the payer and taxable for the recipient. Thus, if you pay or receive both child support and alimony, it is critical to track them separately so you can treat each appropriately when filing your tax return.  

If you are facing a contentious child custody battle or need to modify a support order, turn to the strategic team at Davidson Hopkins & Alexander. Based in Jefferson, GA, they are proud to help clients throughout all of Jackson County secure favorable outcomes to emotionally charged disputes. You can learn more about the comprehensive legal counsel they provide by visiting their website. To schedule an initial consultation with a family lawyer today, call (706) 367-5264.