Do I Have to Pay Taxes on Child and Spousal Support in a Divorce?

 Posted on June 10, 2024 in Maintenance

Divorce often changes the financial situation of people going through it. Courts, therefore, may order one or both of the spouses to pay family maintenance, which refers to child support and/or spousal support (also known as alimony). Alimony is paid by one spouse to the other. When it comes to child support, both parents may be ordered to contribute.

Common questions among both the paying spouse (the payor) and the spouse receiving the support (the payee) are: 

• How do taxes factor into family maintenance? 

• Does the payee need to pay taxes on the support he or she receives? 

• Can the payor deduct taxes from the support he or she pays?

This article will discuss the answers to these questions. However, every situation is different, and any questions regarding family maintenance should be directed to a divorce attorney.

How Do Taxes Factor Into Child Support?

Child support is tax-neutral. This means that the spouse who pays the child support cannot deduct taxes from the payments and the spouse who receives the support does not pay taxes on the money. Essentially, taxes do not factor into child support at all.

The reason for this is that the payor is supporting the child with income that he or she already pays taxes on. It is the same thing during the marriage, when the parents simply use their taxable income to support their child. The only difference is that now, after the divorce, the payor is sending the money to a former spouse instead of spending it on the child directly.

How Do Taxes Factor Into Spousal Support?

Spousal support, or alimony, is also tax-neutral if it was ordered after January 1, 2019. If it was decreed before that date, then the payee must pay taxes on the alimony and the payor can deduct taxes from the alimony payments. Any orders after that date are tax-neutral.

What About Other Tax Benefits?

Other tax considerations depend on which parent has the majority of parenting time, otherwise known as physical custody. For example, it is usually the parent living with the child who gets to claim the child as a dependent on tax returns or is allowed to claim child tax credits.

Contact an Arlington Heights, IL Divorce Lawyer

Not all divorces are equal, and it can be hard to know the tax implications in your specific case. The best way to understand what tax obligations or benefits you have is to consult with an Arlington Heights, Illinois divorce attorney. At A. Traub & Associates, our attorneys are not just excellent at divorce and family law. We also have broad knowledge of the tax considerations that apply to a given case, and we will be happy to make connections with excellent tax attorneys who can help. Call 847-749-4182 to schedule a consultation with a friendly divorce lawyer today.