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Child support and taxes

On Behalf of | Jun 12, 2023 | Child Support |

Child support can be a topic of contention for parents who are negotiating custody in Illinois. Parents might misunderstand or have misconceptions about what child support is for and how the paying and receiving of this financial support will affect their own finances, particularly when it comes to taxes.

What can child support be used for?

Child support is meant to be used by the receiving parent to pay for the child’s needs, including shelter, food and clothing. This can also include utilities, for example, as these are needed for a comfortable and safe living space. There are other child-related expenses for which a custodial parent might use child support, including extracurricular activities and medical bills.

Can the paying parent deduct child support from their taxes?

Child support is not deductible by the paying parent, but it is also not considered income by the receiving parent. Both parents are responsible for supporting their child financially, and child support is meant to ensure this. In that way, child support will not impact a parent’s taxes. There are exceptions, such as claiming the Child Tax Credit if the non-custodial parent agreed to this through IRS Form 8332 and deducting certain medical expenses incurred by the child and paid by the non-custodial parent. However, some conditions must be met for the non-custodial parent to deduct the medical expenses, including:

  • The non-custodial parent paying for the child’s insurance or medical expenses
  • The expenses being over 7.5% of their adjusted gross income
  • The child living with either parent for at least 6 months of the year
  • Itemizing deductions so the medical deduction can be claimed

It is important to understand how child support works and what types of financial assistance can be considered child support. You should also become knowledgeable about the way your taxes can be impacted.