Child Support and Taxes

Posted on August 3, 2005 by Shannon Cavers

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.

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