CHILD SUPPORT

[Myhearts]

Hey all,

Hearts again..  Why is child support not deductible?  I mean I know that the child is the responsibility of the father and mother but if the child only lives with the mother, she gets to use that child as an exemption on her taxes and she is just as responsible for the child as the father is.  Are there any laws that help the father get some type of deduction? 

Just wandering.

Thanks

Hearts

[llecs]

Found this at the bottom of the enclosed link but it doesn't answer why:

http://www.irs.gov/faqs/faq4-5.html

[Myhearts]

Thanks, Llecs!!   That really sucks in my opinion since the noncustodial pays for healthcare as well.  Maybe some type of advocacy works needs to be started by the fathers to get some type of deduction or credit. 

Hearts

[tryingtogetitrightnow]

You can specify who gets the deduction in your support order. I have 2 children and am the NCP (they're with me about 40% of the time). I get one deduction and my ex gets the other.

I think it should be based on your relative support amounts in the cs worksheets. For example, if one parent's contribution is calculated as 90% and the other as 10%, it would make sense that the 90% would get the deduction. In reality, I don't think a court (at least in WA state) would order more than half of the child deductions to a NCP (usually the father).

The official rationale I've heard is that people have to pay after tax when they take care of their children, so that it why it isn't tax deductible. The frustrating thing is that if kills you on your DTI if you pay it when applying for a mortgage and a parent can use it as income when they're receiving it and applying for a loan. So it's kind of the best of both worlds for a parent receiving it and horrible for the parent paying it. All I'd suggest is don't ever get behind. I've always paid mine on time. That's actually what screwed up my credit 'cause I when I was strapped for cash, I neglected my bills instead of CS.

[llecs]

States may have their own rules too.

It makes sense per IRS rules. Here in VA, for example, up to 25% of your income (gross? net?) can be deducted [out of the paycheck] for child support. If someone earns $100k per year, and let's take the net, say $70k, then based on that net, $17.5k could possibly be taken. That $17k or so far surpasses the amount allowable under dependent allowances. The question is: who can claim who on whose return?

Message Edited by llecs on 02-08-2008 12:20 PM

[Myhearts]

Wow.  You are so right about trying to get a mortgage or refi because once they look at how much you are paying in child support, they almost immediately try to deny your loan.  What would be the difference if you didn't pay child support and you had several children that lived with you and you care for?

Hearts

[braznyc]

OK, I have a friend who I asked this question too, and she is an accountant. I asked for another friend, and her very basic answer to me is that "child support" as in a court order isn't automatically deductible because you're paying a portion into your child, and just because you financially contribute doesn't mean you have the "right" to claim that child as a dependent. It all comes down to percentages and how the laws work when it comes to what a dependent means. As in if the custodial parent isn't relying on you as a dependent, it's not automatic, you're only paying your share for your child, I hope this makes sense. If the health care part is stipulated in the order, then again it's not an automatic deduction. I would talk to an accountant or perhaps go back to court, but the two people who I know are divorced and get child support claim their children not the father, in these cases the children happen to live with the mothers.

[tryingtogetitrightnow]

yep, in Washington state who gets the deduction is specified in the child support order. In other states, it might be different.

[Myhearts]

Guess I better look over that support order.  I never saw it, and maybe in IL they don't stipulate like that and it is just an assumption.  I was just amazed at how much DH pays and what is included in that.  The insurance is a separate deduction out of his check from the CS.  It was quite a lot to me to not be taken into consideration regardless of whether the child lives with us or not.  THere is still a relationship and vacations and summer camp expenses that out to be considered outside of the support order.

Just my vent for the day.

Hearts

[Anonymous]

Child support isn't deductible because married or separated, the same money will be used to support the child... taxed. Being divorced parents doesn't allow anyone more tax priviledges, kwim?

After reading through the replies, did you mean why don't non-custodial parents get to claim the child as an exemption for both reducing tax liability and child tax credits? As far as I know, they do. Parents with joint custody often switch off each year or divide the children they claim.