IRS: Can You Deduct Child Support When You Don't Have Custody?
Child support is monetary payments by a non-custodial parent to a custodial parent for the support of a minor child. Child support payments can add up to a significant amount of money over the course of a year. However, the Internal Revenue Service does not allow child support payments to be taken as a deduction when you don't have primary custody.
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Definition
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Child support is court-ordered funds that are paid from one parent to another after the separation or divorce. The amount of child support is usually based on the non-custodial parent's income, although state laws differ as to exactly how much the support payments should be. You may also be required to provide health insurance and pay school tuition and expenses, depending on the needs of the child. Child support payments can be made directly or through a state Child Support Enforcement Unit.
What Qualifies as Child Support?
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Child support payments are payments designated on a divorce decree, separation agreement or court order as child support. Child support is a tax free income for the recipient. Support payments might be designated as "family support" or "alimony" on a court order. These payments are not counted as child support, and while you may not be able to claim those as a deduction on your taxes, they do count as taxable income for the recipient.
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Tax Deductions and Exemptions for Children
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The Internal Revenue Service allows several deductions and exemptions for children. These include the dependent exemption for children who are your dependents, the child tax credit, child care credits, credits for education expenses like tuition and fees and the adoption credit. Unfortunately, for non-custodial parents, none of these exemptions or deductions is usually available to you. In addition, there is no deduction for child support payments.
The 50 Percent Rule
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Although you may not be able to claim child support as a deduction on your taxes, you may be able to claim your child as a dependent if you provided more than 50 percent of his support during the year. If you are not married, didn't live apart during the last six months of the tax year and don't have any written support agreement, whoever provided more than 50 percent of support can claim the child as a dependent on his tax return.
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References
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