Is Child Support Taxable?

Over $20 billion in child support payments were distributed in 2015, according to the U.S. Dept. of Health and Human Services. If you’re divorced and receive child support, you might wonder if you need to include those payments as part of your gross taxable income on your tax return.

Are Child Support Payments Taxable Income?
The short answer is no. If your ex-husband or ex-wife pays child support to you, you do not include those amounts as taxable income on your tax return.

How to Report Child Support Payments on Your Taxes
You don’t report child support payments that you received — or were entitled to — anywhere on your Form 1040 income tax return. Even if you itemize your deductions on Schedule A of Form 1040, child support payments are not an itemized deduction.

Don’t confuse child support payments with spousal support. The Internal Revenue Service requires you to report alimony you received as part of your gross income. The payer must record your name and Social Security number on his/her own tax return, as well.

How Do I Claim a Dependent on My Taxes?
Even if you receive child support payments, you might be able to claim a child as your dependent if you meet certain requirements. The advantage of claiming dependents is that you are allowed one exemption per dependent, which lowers your tax liability. In addition, if you paid more than half the household costs where your child lives, you might qualify for the advantageous tax filing of “head of household” status.

In most cases, if your child lived with you, you’re referred to as the “custodial parent” and you can claim him as a dependent on your income tax return for that year. Your ex-spouse is the “noncustodial parent.”

To claim a child as a dependent, the child must meet the IRS’ broad definition of “qualifying child,” which covers a variety of relatives including grandchildren. The qualifying child must:

  • Be a U.S. citizen, U.S. resident alien. U.S. National or resident of Canada or Mexico
  • Be younger than you
  • Be under age 19
  • Be under age 24 if a student
  • Be any age if permanently and totally disabled
  • Have lived with you more than half of the tax year
  • Not have provided more than half of his own support during the year

Real life is complicated, so the tax laws provide for many qualifications and exceptions to these requirements to address a wide variety of personal circumstances.

Preparing your annual income tax returns is often a confusing and difficult chore; it’s even more complicated for divorced parents.