The impact of child support on federal taxes

At this time of year, many people are pulling together the necessary documents to file their federal and state taxes. For many this is a relatively straightforward process. However, those who receive or pay child support in Pennsylvania and in other states may have questions about how to treat such payments as they complete their tax returns.

Perhaps most importantly for parents who receive such payments is the knowledge that they are not taxable. On the other hand, those who make payments cannot use them as a deduction. Only one parent can claim a child exemption.

Typically, the parent who spends the most time with the child gets to use the tax exemption, even if that parent does not provide the majority of financial support. In some cases, the noncustodial parent can claim the exemption but must have a signed, written agreement from the custodial parent acknowledging that he or she will not take the exemption. Because the IRS will not allow parents with joint custody to share an exemption, couples often agree during divorce proceedings who will be entitled to use it. In some cases, parents will alternate who claims the exemption each year.

When parents are no longer in a romantic relationship, they must still make important decisions together if they are to successfully co-parent. Some decisions that need to be made, such as those relating to taxes, are easy to overlook in the final stages of divorce proceedings and agreements involving child support. With the help of an experienced family law attorney, people in Pennsylvania may be better equipped to ensure that necessary decisions are made in order to protect their, and their child’s, financial situation.

Source:, “Be versed in IRS status of child support“, Casey Bond, Feb. 21, 2016