Child support and taxes

For people in Salt Lake and throughout the rest of the U.S., April is known for only one thing: the stress associated with taxes. Tax considerations can be extremely complicated, particularly for those dealing with special circumstances. The payment of child support is one such circumstance.

The IRS is fairly succinct when it comes to how income from child support is viewed. It should not be claimed as taxable income by those parents who receive it, nor should it be viewed as a deduction by those required to pay it. The reason for this is that in the eyes of the government, one’s responsibility to provide for his or her children doesn’t change with divorce. The expenses required to support those children (excluding certain expenditures for medical insurance and education) are thus treated the same as they are for married parents.

In cases of divorce or separation, the IRS waives the requirement that a child must live with a parent for more than half of the year in order to be claimed as a dependent. Typically, the custodial parent is awarded the right to claim the exemption. Yet parents can also choose the share the exemption as part of their child support agreement.

In order to do this, the non-custodial parent must meet the following qualifications (as outlined by TurboTax):

  •          Both parents must together contribute at least half of the money used to support the child(ren)
  •          The child(ren) cannot live with anyone other than the parents for more than half the year
  •          An IRS Form 8332 signed by both parents must be included with the non-custodial parent’s tax return

The custodial parent has the right to specify if she or she agrees to waive the exemption for only one year, a certain number of years, or indefinitely. 

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