Spousal Support, Child Support & Tax Deductions

Many don’t consider the differences between spousal support and child support. It may seem that the only difference between the two is who is getting the support – the child or the ex-spouse. There’s more to it, though, including 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 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 party, you’re basically getting income from your ex-spouse, which can be taxable on a return. Under tax law, depending on the bracket, 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, 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.

If you have questions about the tax implications of the terms of your divorce, feel free to contact Moskowitz Law Group, LLC to schedule a case review with a New Jersey divorce lawyer. We’d be happy to review your case and help you make informed decisions.