Child support and taxes: FAQ

Make sure you know how to handle child support when you file your taxes. Find out answers to your questions here.

When parents do not stay together, their responsibility to their children does not end. The law expects each parent to remain active in their child's life and provide support, both emotional and financial. Unfortunately, the law cannot dictate emotional support, but it does handle financial support through the child support system in Utah. Whether paying or receiving support, it can cause confusion at tax time, so here are some frequently asked questions relating to this issue.

Are child support payments tax deductible?

While a person may budget child support as an expense, the IRS does not recognize it as one for tax purposes. The only tax implication related to a child is who claims the child as a dependent, but that is separate from child support.

Which parent can claim the children as dependents?

When filing taxes, there is often confusion over which parent may claim the children as dependents. Tax professionals explain the basic IRS tax rule is that the parent who provides for the child financially more than 50 percent gets to claim the child on his or her taxes. Typically, this is the custodial parent.

In most cases, for the non-custodial parent to claim children as dependents, he or she needs to either have a court order to do so that specifically states this right or have a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent (Form 8332) from the custodial parent. There may also be an exemption the first year after a divorce or separation since parents may share financial support or income only comes by one parent during that time.

Can the court override the IRS rule on dependents?

The Utah Courts explains the court can award the right to claim children as dependents, but it may only award that right to a parent if he or she will receive a tax benefit from claiming child. Non-custodial parents may not get an exemption if behind on child support payments. The court looks at the financial support and other factors regarding the child's care when assigning dependent claim status.

Can past due child support impact my taxes?

If a person owes child support in arrears, it is very possible for that to have tax implications. According to the Utah Department of Human Services, if child support is past due, the parent who owes the support may have his or her state and federal tax refunds taken to pay towards the obligation.

Child support is a legal requirement for parents who do not have custody of their children. It ensures the parent provides for the child financially, but it can lead to issues when it is time to file taxes. If you need assistance understand the impact of child support on your taxes, please contact an attorney, such as Kristopher K. Greenwood & Associates, LC.