Many men separated or divorced who have to pay child support, worry about what it does to their taxes.  One piece of good news where this is concerned is the fact that child support is tax-free.

What this means for youer ex is that when she files her federal tax return, she does not have to pay any taxes for child support that either she or your child received.

Many people that have to pay child support t confuse the tax rules with spousal support and the two are not the same. Spousal support is tax deductable to you where child support is not.

It is important to make sure you fully understand how things are worded in your arrangement for child support so that you do not run into any unnecessary tax penalties.  In order for money to legally be called child support, it must be listed directly in the divorce decree or a separation agreement and it must state “child support”.

t will not be considered child support for tax issues if it is grouped in a payment called “family support” or even “alimony”, both of which are taxable.

In order for a parent to claim the child on his or her taxes, he or she must have provided at least 50% of the support for the child during that particular tax year.  Keep in mind that only one parent can claim the child or children in question regardless if it is joint custody.

You can get severely penalized if both parents try to claim the child or children.  It is very important for both parents to be on the same page where this issue is concerned.

There are some exceptions to the rules about who can claim the child and that is if the parent who has legal custody waves his or her right to claim the child on taxes or if they relinquish their right for one year, many years, or all together to claim on taxes.  This will have to be listed in the separation agreement by the court or be listed in the divorce decree.

You and the other parent need to be very clear where tax laws are concerned on who is going to claim the child or children when it is time to file for taxes.  When in doubt of what to do or what form to fill out, you should seek the advice of the IRS or go to a tax advisor.  You want to avoid getting unnecessary tax audits or penalties due to a simple error when filing your return.

If you are just now going through a separation or a divorce, be sure that the court words it correctly in the final papers so that it will be very clear as to who pays support and what it is for so there will be no issues during tax season.

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