How Child Support Impacts Taxes

Child support payments are not tax-deductible. Child support is tax neutral, so you can’t claim payments on your tax return. Payments made are not tax deductions, and payments received are not taxable income.

How Does Child Support Impact Taxes?

Some people lose their entire tax returns to child support, but in most cases, child support has little effect on either party’s taxes.

The parent paying support does not deduct their payments from their taxable income. It remains as income because if the child was living with that parent, the money would go to the cost of having a child. And standard child expenses aren’t deductible from income.

The parent receiving support does not report that money as income because the other party pays those taxes. This also means the receiving party cannot claim it as earned income towards qualifying for the Earned Income Credit.

Child support’s greatest impact occurs when the paying parent has back child support.

Back Child Support and Taxes

Back support, also known as arrears, is the result of not paying child support. The Department of Revenue (DOR) can intercept tax returns if the taxpayer owes a government agency.[1] The child support agencies are government entities, so the DOR can take tax returns for any owed child support.

If I’m Remarried and Have Back Support, Will the IRS Take My Spouse’s Tax Return?

Yes, if you file jointly with your spouse and one of you owes back child support, then the DOR will take any returns to cover the owed money. But you can file an Injured Spouse Claim to get back your spouse's portion of the return. To file an Injured Spouse Claim, you file the 8379 form which is found on the IRS’s website.

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Considerations

Where Can I Find Child Support Records?

If you need a record of your child support payments, you can get that information from the Child Support Online Services website.[2]

If I Pay Child Support, Can I Claim My Child as a Dependent?

Paying child support does not impact who gets to claim a child as a dependent. Generally, the custodial parent claims the child as a dependent. In some cases, parents switch off who claims the child each year. Or if there are two kids, each parent could claim one. Either way, these circumstances are outlined in a divorce order or a custody and placement agreement.

Agreements and orders surrounding child support can be confusing, so for any questions or if you wish to modify an order, we here at Sterling Law Offices specialize in family law and would love to help.

Frequently Asked Questions

How does paying child support affect my tax return?

Child support should not affect your tax return unless you owe back child support. If you owe back child support, the Department of Revenue (DOR) can take your tax return money to pay off the back child support.

Is child support taxable in Wisconsin?

Child support is not taxable as income for the party receiving the child support. It is taxed as regular income for the paying party and cannot be deducted.

Does child support affect the Child Tax Benefit?

Child support does not affect child tax benefits. Who gets to claim the child as their dependent on their taxes should be outlined in a custody and placement agreement or divorce order.

Does child support come off your taxable income?

Child support is not deducted from your income, it is taxed normally. The receiving party also does not report it as income on their taxes.

Is child support considered income?

Child support is not considered income for the receiving party and should not be reported as income on their taxes. It is taxed on the paying party’s side, not the receiving party’s.

References: 1. Refund Interception. Wisconsin Department of Revenue. (2020, October 12). | 2. Child Support Tax Information for Parents. Wisconsin Department of Children and Families. (n.d.)