Tax Implications for Child Support Payments in Westborough

State law protects a child’s rights to financial support from both parents. The state calculates child support payments based on financial guidelines that consider a number of factors, such as each parent’s income before taxes, how much is paid for health insurance, and how much is paid for daycare, among a few other things. We are often asked how child support is taxed. Accordingly, a local attorney from O’Connor Family Law can help you understand the tax implications of making or receiving child support payments in Westborough.

Because our team has over 35 combined years of exclusive family law experience, we can address questions about how the support you provide to your children could play out in your taxes and income calculations. We can also discuss whether you could recover overdue support owed to you from the other parent’s state or federal tax refund.

Income Tax Withholdings Related to Child Support Payments in Westborough

Because many parents have monthly child support payments garnished from their wages, they often wonder how employers calculate their income tax withholdings. Employers calculate and withhold income tax based on a parent’s net income and then subtract the amount paid toward child support before giving them their final pay in their paycheck.

You do not get to subtract the amount you pay in child support from your overall income within your state or federal taxes, however. You may be eligible to claim your children, head of household status, or payment toward daycare, medical, or educational expenses for your children that you will want to layout within a custody agreement.

Excluding Child Support as Income on State and Federal Tax Returns

When calculating a parent’s support obligations, the state has created “Child Support Guidelines” that looks at a number of different issues that arise when financially caring for a child and has provided guidance for the Court to follow when determining an appropriate child support order. Some of the basic needs that are often believed to be covered within the child support calculation are:

  • Childcare, babysitting, or daycare
  • Food
  • Clothing
  • Housing
  • Transportation
  • Medical, dental, and vision insurance

Because child support takes into consideration the amount of financial support that should be contributed to a child’s care in addition to the amount of child support that parent receives, the child support order is not meant to cover all of the child’s expenses in and of itself. Child support also does not count as taxable income on a state or federal level. The amount of child support can, however, effect how the state considers a parent’s income when determining whether that parent should receive any financial help for any reason. Parents should consult with a local attorney about the tax implications of child support and how it may impact an individual’s taxable income on other levels outside of just taxes.

Recovering Overdue Child Support Payments from Tax Refund

Children come first in the Commonwealth, and the law prioritizes child support over many parental financial responsibilities. Accordingly, parents may speak with a local attorney about recovering these payments from an obligor’s tax refunds. A lawyer may even request that state officials intercept federal economic impact payments – including COVID-19 stimulus checks – to cover overdue obligations. Legal counsel can discuss the implications of a tax refund offset for late child support payments with parents.

Discuss the Tax Implications of Child Support Payments with a Westborough Attorney

State and federal tax regulations include special provisions related to child support payments and recoveries. Whether you pay support for multiple children, wish to claim a child as a dependent, or want to levy the payor’s bank account or tax refund, consider discussing your rights with a qualified family lawyer on our team. When your litigation costs are solely in order to seek payment on outstanding child support payments, they can sometimes also be included as a tax deduction.

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