Can I Write Off My Child Support Payments on my Taxes?
Quick answer: No.
For a longer answer, you may want to know why. Here’s the reasoning: if you are married and living with your family and raising your children—there’s no deduction for paying for their school clothes or feeding them. That’s pretty much what your child support payments are—feeding the kids and paying for clothes. So whether you live with your kids, or live apart, the money that’s used for those day to day necessities is not a tax deductible expense. You don’t get a deduction for paying it and your ex doesn’t claim it as taxable income.
What about alimony? Alimony is different—you get to deduct alimony on your tax return if you pay it, and your ex has to claim the alimony as income. Alimony counts as earned income—that’s important because you can use alimony income to claim an earned income credit. Now you might think that alimony should not be classified as “earned income”, but as one of my clients explained to me, “Oh, honey—trust me I EARNED it!”
You might be thinking that paying alimony is better than paying child support—but there’s a catch to that thinking. If the “alimony” ends when the kids turn 18— the IRS will call it child support anyway so you lose all the tax advantages. Alimony basically goes for the life of your ex or until a re-marriage occurs. So while alimony has some tax advantages—child support at least has an end date. (There are some cases where alimony is only paid for a limited time, but it has to be very separate and distinct from any type of child support to be valid for tax purposes.)
Some people pay both alimony and child support. In a case like that you can deduct the alimony portion of your payment on your tax return. Now it’s important to know—if you fall behind on your payments—the IRS assumes that you pay the child support first. For example: Let say you pay $300 a month in child support and $200 a month in alimony. For the year you pay $6000 all together: $3,600 in child support and $2,400 in alimony. You’ll take a $2,400 deduction for the alimony on your tax return.
Now, what happens if you lost your job and didn’t make any payments in November and December of the tax year? You would have paid $5,000 total, right? ($500 times 10 months) And $2,000 of that was for alimony. But according to the IRS—you pay the child support first. So of the $5,000 that you did pay, $3,600 went towards the child support and you only get to deduct $1,400 (the amount that’s left) for the alimony. So make sure that you’re all paid up before the end of the year if you want to deduct all of the alimony on your tax return.
If your hungry for more, try http://www.mentalfloss.com/blogs/archives/135170 to put icing on the cake.