What are the Tax Implications of Paying or Receiving Child and Spousal Support in California?

There are definite tax implications regarding child and spousal support in California, and here are the differences:

Spousal support deductibility:
Spousal support is generally considered under state and Federal law to be tax-deductible to the spouse who is paying such support, and is reportable income to the spouse who receives such income.

Child Support deductibility
Child support is generally considered under state and Federal law to NOT be tax-deductible to the spouse who is paying such support, and so the spouse receiving such support does not have to report such support as income on his or her tax returns.

Custodial Parent Entitled to dependency exemption for children unless waived
Generally, state and federal law states that the parent who has at least 51% custodial timeshare has the right to claim the minor children as dependency tax exemptions on the income tax returns.

However, that spouse can waive such right and give the noncustodial parent the right to claim the children as exemptions, but it is advisable to have such wavier in written form. In situations where the on-custodial parent earns a much higher-income, giving the child tax exemption to that parent who will benefit much more by such exemptions may be a good faith gesture, but it is advisable to seek more support that what the non-custodial parent would have been liable to pay in exchange.

You should always seek the advice of a tax professional concerning tax issues and what the best course of action is in your particular case.

For more information or to schedule a consultation, contact Orange County divorce attorney Gerald Maggio of The Maggio Law Firm, by visiting www.maggiolawfirm.com or calling (949) 553-0304.

Gerald A. Maggio is an experienced Orange County divorce and family law lawyer and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.