Child support payments can be costly depending on the state you are in and your child’s needs. While these payments are sometimes a significant amount of a noncustodial parent’s income, child support is not considered taxable. Contact a Suffolk County child support lawyer for more information on your parental rights and responsibilities.
Is Child Support Taxable?
Child support payments are not taxable in the state of New York. This means that noncustodial parents who pay child support to their child’s other parent cannot deduct those payments from their income when filing their taxes. Likewise, the parent who receives child support payments on behalf of their child does not have to file them as income when they file their taxes.
Why Are Tax Deductions Beneficial?
When United States taxpayers file their taxes each year they provide the government with information on their various forms of income. A tax deduction is an amount that you subtract from your total income when filing so you do not have to pay taxes on it. Deductions make your income lower which lowers the amount of tax you have to pay. This can benefit you by decreasing the amount you owe the IRs or increasing the amount you receive in a tax return. The following are some examples of valid deductions.
- Business expenses like the use of your car or home
- Alimony payments
- Money that you put in an IRA or health savings account
- Charitable donations
- Profits from selling your home
Child support payments are not listed on any approved list of deductions. Financially supporting the growth and development of your child is an obligation that a parent has whether or not they are married to their child’s other parent or not.
Who Gets to Claim the Child as a Dependent?
While child support payments are not taxable, there is another way for parents to benefit at tax time. When a person has a qualifying child who financially depends on them, they may be able to claim that child as a dependent, which can make them eligible for valuable tax benefits—most notably the Child Tax Credit. But which parent gets to claim the child?
According to the IRS, a parent can claim their child as a dependent if they provide 50% or more of their total financial support in a calendar year. A custodial parent (the parent who has custody of the child for the majority of the time) is automatically considered to be the parent who provides more than half of the child’s support. Unless both parents settle on a different agreement, the custodial parent has the right to claim their child. The noncustodial parent can claim the child only if the custodial parent signs a written statement releasing that claim, using IRS Form 8332. Without the signed form, the IRS will not honor the noncustodial parent’s claim, even if a divorce agreement allows it.
Frequently Asked Questions
Is child support taxable in New York?
No. Child support is not taxable in New York. The parent who receives child support does not report it as income, and the parent who pays it cannot deduct the payments. This applies for both federal and New York State taxes.
Is child support tax deductible for the paying parent?
No. Child support payments are not tax deductible. The IRS does not list child support as an allowable deduction, so the noncustodial parent cannot subtract these payments from their taxable income.
How does a noncustodial parent claim the child on taxes in New York?
The custodial parent has the default right to claim the child. To let the noncustodial parent claim the child for the Child Tax Credit, the custodial parent must sign IRS Form 8332 releasing the claim. Without Form 8332, the IRS will not honor the noncustodial parent’s claim, even if a divorce agreement allows it.
