Many don't consider this given how similar both types of support are.
Really the only difference between the two is who's getting the support
– the child or the ex-spouse? There's more to it, though, other
than the fact that legally child support can be enforced not only within
a court, but
outside the court. In the realm of tax law, this plays a surprisingly huge role. How so?
Consider the fact that
child support is undoubtedly
not tax deductible or even taxable on your return. That means you don't
get any credit for it, nor is there any money owed to the government from
it. So it's a good and bad thing, at the very least for a noncustodial parent.
Spousal support, though, offers a very different situation to both parties:
For one thing, spousal support is, in fact, "taxable income."
As the receiving spouse, you're basically getting income from the
other, which can be taxable on a return. Under tax law, depending on the
bracket, though, that could result in a higher or lower refund. It's
a good thing to keep in mind, though. On the other side of it, though,
because spousal support is taxable, it's also "tax deductible"
to the paying spouse. That means on the paying spouse's return, that
spouse can deduct those amounts successfully, potentially resulting in
a credit of some kind.
Undoubtedly, that could mean less problems with alimony, also known as
spousal support, as no previously married spouse wants to fork over money
to the other for any reason, we can imagine. At the very least, this softens
the blow a bit over the fact that you might see a benefit come back to
you in taxes. Consider the possibilities and just remember: taxes can't
really touch child support at all – unless you have an arrearage!