Child support, alimony and lawyer fees: What are tax-deductible?

Tax season is now underway and many Connecticut residents have started on their 2014 returns. Those who have divorced in the past year may have some concerns about how child support is taxed. Is it tax-deductible to the payer? Does the payee have to claim it as income? What about alimony and attorney fees? Read on to find out the answers to these questions.

Child support is not considered income for IRS purposes and therefore is not a tax deduction for parents who pay it. There are, however, deductions available for parents who claim the children as dependents. In most cases, the custodial parent claims the children, but parents may agree otherwise.

Alimony, or spousal support, is different. Those who receive it must count it as income, and those who pay it can count it toward their deductions , unless it is specifically characterized as non-taxable / deductible. In some cases, certain attorney’s fees may qualify for a tax deduction. This can be determined through consultation with an attorney and tax advisor.

BRODER & ORLAND LLC is experienced in the tax issues related to various support and alimony arrangements and frequently works with tax specialists as well.