Peaceful Divorce

What Is The Difference Between Alimony and Child Support?

In terms of taxation, there is a big difference between alimony and child support.

Alimony is considered tax-deductible for the payor and taxable income for the payee. For alimony to be deductible, the payor and payee cannot file a joint return or live under the same roof, in addition to several other requirements.

Child support, on the other hand, is not considered taxable income by the spouse receiving it, nor is it tax deductible for the spouse paying it. Only the custodial parent can claim the child care tax credit, which allows a percentage of child care expenses to be credited against their taxes.

Which parent receives the tax exemption benefit for dependent children is subject to IRS regulations. Typically the parent with physical custody for more than half the year has the right to the exemption as long as:

  • The parents are divorced, separated and living apart for at least the final 6 months of the tax year;
  • Both spouses, together, provided more than half the total support of the child;
  • The spouses have not agreed in writing that one spouse can claim the dependent exemption; and
  • A written IRS waiver has not been filed, releasing the claim of exemption (Form 8332).

As for filing as head of household, only the parent who has physical custody - more than half of the year - is able to use this status. If legal and physical custody is divided 50/50, neither one can file as head of household, as the dependent child resides with neither parent more than 50 percent of the year. The IRS does not recognize 50/50.

The IRS has some great publications, such as Publication 504 that talks about alimony, filing status, retirement, property settlement information, exemptions and legal fees, written in simple, easy to understand sentences. There’s also Publication 503, which discusses child and dependent care expenses. These can be found on the IRS website at www.IRS.gov.

Robert D. Bordett CFP, CDFA
Collaborative Practice and
Mediation Services

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