Looking at how the IRS views child support

I pay my former spouse more than the court requires for child support. Should she pay tax on the amount of extra money I give her?

 L.S., Indianapolis   


The IRS tries to stay out of family life when it comes to the issue of child support, and as a result there is no requirement for the recipient to pay tax on the amount received. Likewise, there is no deduction allowed for the person making the payment. It would appear that the theory at play here is that the money you give for support of the children is supposed to go toward support of the children and if the IRS were to siphon off a percentage of the money, that would somehow equate to stealing money from children, a practice the IRS tends to shy away from.  


Think about the bad press that could emanate from the taxation of child support. You give your ex-spouse money to put food in the mouths of your children, but the IRS thinks the money could be better spent providing recreational events for federal prisoners. It just wouldn't look good.  


Interestingly, the same logic doesn't seem to apply when it comes to alimony payments. Although the alimony you pay may be designated as being for the support of your former spouse, the IRS seems to think the former spouse should share this support money with the rest of the country and thus charges income tax on the payments.   


If you are making payments that have been designated as alimony, but those payments are subject to a reduction when your child reaches a certain age, the portion of the payments that represents the reduction will be construed as child support and you will not be entitled to take a deduction for (nor will your ex-spouse be taxed on) the amount representing child support.  


Anyway, back to child support. If you generously give more than you are required to give toward the support of your children, you are a generous person, and the IRS no doubt will be happy for you. There is no tax requirement relating to the overpayments of child support.  


Even if you aren't payment child support as a result of a court order, but are making payments on behalf of your child, the money will go untaxed until such time as the child reaches a certain age (typically 19, unless the child is a student, then 24), or if the child leaves home and begins providing his or her own support.  


The IRS does get involved, however, if you decide not to make some of your required child support payments. The IRS works with state governments to attempt to ensure that child support payments are made. A failure to make court-ordered child support payments may result in the IRS diverting your tax refund to cover the unpaid support.  


If the IRS agrees to help collect delinquent child support, you will receive a notice indicating that your tax refund will be diverted to the state. The state will also notify you that it is about to request money from the IRS and you will receive information about how to contest this diversion of your refund.  


copyright   2000 Gail Perry - Fun with Taxes