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Tax Implications Of Support Payments

Is child support tax deductible?

No.  Child support paid pursuant to an Agreement or Court Order is not tax deductible to the payor, which also means that it is not considered taxable income for the recipient.  The tax implications can be significant if, for example, the support payor and recipient find themselves in different tax brackets.  

Is spousal support tax deductible?

Maybe. Spousal support is tax deductible by the payor and included in the recipient’s income only if it is paid on a periodic basis (i.e. monthly).  Additionally, the payment must be made pursuant to a Court Order or Agreement which clearly outlines that the payment is solely for the support of the former spouse.

Sometimes, a payment of spousal support will overlap with payments made in settlement of property issues.  When it is not clear whether a settlement amount paid is strictly for spousal support, the payor will not be able to deduct this amount.  It is therefore important to consult a lawyer when contemplating an agreement that results in a “global” settlement (i.e., one where it may not be clear which part of the settlement is for support, and which part is for property).  

At Lloyd and Kemper Family Lawyers, we practice exclusively in the area of family law, including matters related to: parenting and custody of children, child support, spousal support, division of property, marriage contracts, cohabitation agreements, separation agreements, divorce, Family Responsibility Office matters, and enforcement of orders.  If you wish to discuss your options, legal rights and obligations, or have questions specific to your situation, please contact our office at 905-493-6788 or info@lkfamilylawyers.com.

For more information, visit our website, at www.lkfamilylawyers.com.

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