If you pay child support or if you receive child support, there’s a good chance that you’ve wondered how taxes work with child support. It’s a great question. You might be wondering if you pay taxes on child support that you receive or if you pay taxes on child support that you pay.
You might wonder if you need to work with a skilled Las Vegas family law attorney to determine your child support tax obligation. Learn more about what you need to know about child support and taxes in Nevada here.
Is Child Support Taxed in Nevada?
No, child support is not taxed in Nevada. A child support recipient receives the money tax-free. If you receive child support in Nevada, you may spend it without reporting it as income on your taxes.
Is Child Support Deductible From Income in Nevada?
No, child support is not deductible from income in Nevada. If you pay child support, you must pay the taxes on the income. Income that is paid for child support is also subject to taxes in Nevada.
Do I Have to Pay Taxes on Child Support That I Pay in Nevada?
In Nevada, child support is not deductible by the child support payer. If you pay child support, you must pay taxes on the amounts that you pay. You may not deduct child support payments from your taxes. For tax purposes, the money is treated as yours – as though it never left your hands. You must report every dollar that you pay in child support, and you can’t take any deductions from taxes because you pay child support.
On the other hand, if you receive child support, you don’t have to pay income taxes on the money. The money doesn’t count as income for the child support recipient. Instead, you receive the money tax-free for the benefit of the children.
Child Support and Tax Credits in Nevada
Another issue related to child support and taxes is the child tax credit. Parents need to know who can claim the child tax credit for the child in Nevada. The default rule is that the parent who provides the bulk of the physical care for the child claims the child tax credit. However, both parents often provide physical care for a child, and parents who pay child support often believe that they should have equal access to tax benefits for children that they financially support.
You can make an agreement with the other parent about how to divide the child tax credit. You can’t split the child tax credit for a single child entirely in two in a tax year. Instead, one parent must claim the entire tax credit in a tax year. You can alternate years with the other parent with parents claiming the child on an alternating schedule. If you have multiple children, the parents can split the number of children that they claim. You can work out the child tax credit however you desire.
If you’re creating custody and child support orders for the first time, the child tax credit is an important issue to discuss with your attorney. How you divide the child tax credit must be in writing in an order signed by the judge, to be enforceable. When you reach an agreement, you must put it in your court order for it to be official. Parents may need to execute an IRS form to make it clear what parent is claiming the child tax credit.
Tax Refunds Can Be Garnished for Unpaid Child Support
Even though child support isn’t deductible from taxes or taxed, a tax refund can be garnished if a parent owes child support. The IRS can garnish your tax refund for the amount of unpaid child support. If you pay child support, you can address your withholdings and file separately from your spouse if you’re hoping to minimize a garnishment.
If you have a child support arrearage, your best option is to work with a child support attorney in Las Vegas to address the issue directly and minimize the impact to you, the minor children, and other family members.
Child Support and Unusual Taxes in Nevada
You might wonder what happens if you pay extraordinarily high taxes. You might wonder how child support works if you have unusually high, mandatory deductions from your income either for taxes, pension contributions, union dues, or special circumstances. Child support is based on gross income in Nevada. Typically, unusual circumstances like very high taxes aren’t taken into account.
If you have a unique situation where it’s unfair to hold you to the same requirements as everyone else based on a tax situation, you can ask the court to make a special exception for you. Something like an unpaid tax bill isn’t going to work as an exception. But if you have a very good reason that it’s unfair to you to base child support on your gross income, you can bring it to the court’s attention. It’s important to remember that the courts make exceptions only in specific cases. The skilled family law attorneys at Half Price Lawyers can help you determine if you’re a candidate to make this kind of request.
Child Support and Alimony Taxes in Nevada
The law about alimony and taxes changed in 2019. The rule used to be that you could deduct alimony payments from your taxes. The rule was that alimony recipients had to claim the money as their income. That rule changed in 2019.
The new rule makes alimony payments like child support payments in that you can’t deduct alimony payments from your taxes, and you don’t have to claim alimony payments that you receive on taxes either. The new law only applies to new divorces, so if your divorce is already finalized before January 1, 2019, alimony may still be deductible or reportable as income.
Family Law Attorneys in Nevada
Do you have questions about child support and taxes in Nevada? The team of child support lawyers at Half Price Lawyers can help. Let’s talk about how taxes apply to your case and how you can protect your children and your rights under Nevada law. Call us today.