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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 income so your ex will have to pay taxes on it. Alimony does not count as earned income for the earned income tax credit, 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.
Hi Scott,
You make an interesting argument. And while yo feel like you have no control over how your child support money is spent, it seems to me that if your ex were to just buy purses and shoes and your child were to go homeless and hungry, you would have some legal grounds to have that support changed. Now alimony, on the other hand, which could be a “purses and shoes” expense, is taxed to the recipient.
Here’s an opposing thought though…. I fully understand the “if you’re married it’s just the cost of raising kids” argument. I have no problem covering expenses for my child and not being able to deduct them. However, to play devil’s advocate, in that scenario, the “cost” of you children is simply what you’re willing to spend on them. You (and your partner) retain control over the funds, how much to spend, and how to spend them. You could spend the absolute minimum on your child, or completely spoil them to death, it’s your choice. So the true “costs” of having child is 100% up to you and your cash outlay. However, when I pay child support, I have zero control over how those funds are spent. They could go 100% to my ex’s purse and shoe fund and zero of it to my child. They could go 100% to my child. I have no control and no say over the matter once they leave my account and there’s no law that requires any accountability by the receiving parent to support that the funds have been put 100% towards costs of raising the child.
I’d like to see the laws re-written so that the income is taxed at the person who controls the funds. In this case, the income would be taxed with the receiving parent. I have little hope this will ever happen though as that would mean shifting the tax burden to the lower income parent and would reduce overall tax income received by the Government. I’m sure it will be a cold day before a government does something to reduce their income. However, this seems to be the most fair approach to the situation and the most fair assignment of the tax liability.
Hi Tax Preparer,
You are absolutely right. So right, in fact, that I changed the blog post. I had been given wrong information and when I got your post I went to find the source, but your source was better and I confirmed it elsewhere as well. Thanks for pointing out my mistake.
The IRS specifically identifies alimony as unearned income. See http://www.irs.gov/Individuals/What-is-Earned-Income%3F
Hi Michael,
Interesting question. So you mean writing off your child support as a daycare expense, right?
But here’s the problem with that–I mean besides being illegal and getting you audited and all that.
I’m married and my husband and I live together and we spend money to take care of our kids. (Aren’t kids expensive?) It’s just part of being a parent, you’ve got to pay to feed them, clothe them, and keep a roof over their heads. That’s our job as a parent.
In your case, you have kids, you still have to pay to feed them, clothe them, etc. the difference between you and me is that you don’t live with your kids and their mother any more. (You’re probably taller, but that’s not where I’m going with this.)
The point is, even though you no longer live with your children, there’s still the societal norm that says you’ve got to take care of them, and that’s why there’s no deduction.
When it comes to claiming the child care expense–only the custodial parent may claim that on the tax return–so even if you set something up to “pay” your ex to care for your child–it wouldn’t be tax deductible unless your child actually lived with you and you were only paying your ex to be a daycare provider.
Sorry, there’s no winning this one.
Now let me ask you a question if i pay child support after my checks are already taxed.. out of my own pocket instead of haveing them take it strait from my emplyer as long as all my child support is up to date i get to claim my kids every other year on my taxes. Why wouldnt i be able to claim my child support under total cost for child care??