Child Support & Recipient's Taxable Income
There are two ways on how a mother or father may deal with the legal issue concerning the payment for child support. The first way is through extra-judicial settlement wherein the parties come into an agreement as to how the fees for the child's maintenance and support will be paid. The second way is through litigation wherein one party institutes an action against the other spouse.
One who avails of the judicial remedy must make sure that the complaint or action is filed with the court which has jurisdiction to hear and decide over the subject matter of the case.
In cases where the former spouses resort to the judicial remedy, it must be noted that the court order stating the amount of child support must be final. The liability or obligation of a particular parent will continue to exist until the supported child reaches the age of majority or eighteen years old. Under our jurisdiction, there are some notable exceptions wherein the parent may still be obliged to pay for the child support even the child is no longer a minor. One of which is when the child is still in high school upon the time when he or she reaches the majority age.
Some parties have legal questions concerning the payment of child support. One of the most common issues asked is whether or not the recipient of the child support is taxed based on the amount that the other spouse may be ordered to pay. Based on the previous rulings of the Supreme Court and some existing laws, the said question must be answered in the negative. The recipient of the child support payments will not be taxed. The said amount must be excluded from the computation of the gross income. It will not be treated as a taxable income which means that there is no liability on the part of the recipient to file an income tax return for it.
If you are still confused about the tax treatment of the child support, do not hesitate to research lawyers. You can always book an appointment with him and inquire about the important legal matters that may affect the flow of your finances. Just remember that if you are the recipient of the payment for child support, there is no obligation on your part to include it in your income tax return. The said payment will be considered as tax-exempt.
References: Child Support Taxes
Child Support Articles & Frequent Questions
Three Simple Steps
Find out how simple the divorce process can be when you work with a law firm that puts you first. Book your consult today!
3. MOVE FORWARD