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Child support and how it affects taxes

Child custody arrangements as well as parents' incomes are two of the most significant factors considered when the amount of child support is determined by a family court. As child support, custody and income are all closely related financially, child support can directly affect the noncustodial parent at tax time. What follows are answers to some of the most common questions that noncustodial parents in Florida typically have about child support and how it affects their taxes.

Child support is not considered taxable income by the IRS. Thus, the nocustodial parent (payer) cannot deduct child support payments and the payments are not taxable to the custodial parent (payee). When parents are calculating their gross income so that they may establish whether or not they must file a tax return, the amount they received in child support payments is not to be included.

If they have dependent children, some individuals might be able to claim a tax credit known as the Child Tax Credit. However, the only parent who can claim the Child Tax Credit is the parent who is using the dependency tax exemption. Parents curious about this tax exemption are advised to read Form 1040's instructions and/or the index of Form 1040A's instructions to see how they could qualify for this credit.

These are but two tax issues that a noncustodial parent might have questions about when tax time rolls around. However, this is not to be considered an exhaustive list. Whenever taxes and child support are both at play in Florida, it can sometimes be a complicated situation. In situations like these, parents often choose to consult an experienced tax attorney.

Source: Find Law, "Child support and taxes: non-custodial parent FAQs", Accessed on Jan. 5, 2016

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