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Is child support taxable?

Any child support payments you’ve received won’t be counted as taxable income. And if you’re the one making the child support payments, the income you used to do so won’t be tax deductible. But there are ways to save on taxes in the process. We take a closer look in this guide.

Is Child Support Taxable?

Child support isn’t taxable, according to the IRS. The government considers child support payments to be “tax neutral” personal expenses, so this money won’t be subject to income tax. This means that you won’t have to include child support payments received on your tax return.

For instance, if you’re on the receiving end of child support payments, and you normally get roughly $2,600 per year, you won’t have to factor in the $2,600 when determining your gross income for the year.

Child Support: Is It Tax Deductible?

Under IRS law, personal expenses aren’t tax deductible; therefore, child support isn’t tax deductible either. This doesn’t have tax implications for the recipient of the child support, but it affects the payer. Specifically, the payer is taxed for the money used to make the child support payments.

However, this doesn’t mean that child support is completely devoid of tax benefits. You may qualify for tax credits such as the Child and Dependent Care Tax Credit and the Child Tax Credit— but only if you have the Head of Household filing status. You can attain Head of Household filing status by claiming your child as a dependent. If you’re the payer, you can claim a child as a dependent if they lived with you for more than half of the year, according to the IRS.

Bottom Line

Child support income isn’t taxable for the recipient, and the payments aren’t deductible for the payer. If you’re the recipient, you won’t have to account for any child support income while calculating your gross income and filing your tax return. This is mainly because child support payments are considered personal expenses. Payers of child support may receive tax benefits, though, if they claim their children as dependents.

Tax Planning Tips for Those with Dependents

  • If you are divorced, only one parent can claim a child as a dependent on his or her tax return. Typically, the parent who files the tax return first gets the right to claim the child as a dependent. And this comes with benefits such as Head of Household filing status, tax credits and other financial perks.
  • Financial advisors can answer any of your questions related to tax planning, investing, retirement and more. Not sure where to find the right fit? SmartAsset’s free financial advisor matching tool connects you with up to three advisors in your area.

Photo credit: ©iStock.com/Tero Vesalainen

Rickie Houston CEPF® Rickie Houston writes on a variety of personal finance topics for SmartAsset. His expertise includes retirement and banking. Rickie is a Certified Educator in Personal Finance (CEPF®). He graduated from Boston University where he received a bachelor’s degree in journalism. He’s contributed to work published in the Boston Globe and has worked alongside award-winning faculty for the New England Center of Investigative Reporting at Boston University. Rickie also enjoys playing the guitar, traveling abroad and discovering new music. He is originally from Wilmington, North Carolina.
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