Differences In Tax Treatment Of Spousal Support and Child Support

In talking to Oregonians as part of our divorce law practice, we come across a lot of misinformation in the public about tax treatment of child support and spousal support.  Many people think they are treated the same, or that child support is taxable income. Child support is not considered taxable income, and child support and spousal support are treated differently for tax purposes.

Child support is not income to the recipient, and the parent paying child support receives no tax deduction.

Spousal support (or alimony, per IRS lingo) can be deducted by the paying parent, and is included in the taxable income of the recipient.

Sophisticated calculations can be done to maximize the tax benefits to one or both parties. Engaging a CPA or a Certified Divorce Financial Analyst to work with your attorney can help assure that all of the tax consequences of support package are considered.

 

About Sean Stephens

By Sean Stephens Google + Sean Stephens is divorce and family law lawyer, and a founding member of Stephens & Margolin LLP He was born in Eugene, Oregon and is a fourth generation Oregonian. Sean Stephens attended the University of Oregon, and graduated in with a Bachelor of Science in Psychology, with a minor in English Literature. His psychology studies emphasized early childhood development. You can find more about Sean Stephens at Stephens & Margolin LLP Follow him
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3 Responses to Differences In Tax Treatment Of Spousal Support and Child Support

  1. Robert says:

    There are many faults with Oregon’s child support system. If child support is not taxable or tax-deductible, why is there no mandatory accountability for the receiving party? There is enormous accountability on part of the paying party, to the point of being jailed for non-payment. A check that bears the name of the receiving party is taxable income if there is no enforcement on how that money is spent.

    • Robert,

      There is a statute that allows the person paying support to request an accounting of how support is spent from the recipient, however, money received and spent on general household purposes when you live with kids is not going to cause a problem with the court. If a parent is receiving support and the kids aren’t having their basic needs met, the court is more likely to be concerned.

  2. During law school we discussed the tax issue as it applies to child support and spousal support. Today, in my practice, I encourage my clients to seek the advice of a CPA if they have questions.

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