Receiving Child Support

• Child support payments are not taxable. The payments received from child support are solely for the child and not considered income to the custodial parent. You cannot claim child support payments on your taxes. A parent who receives alimony is required to declare the spousal support payments as income. If the parent is awarded family support, deduct the amount designated for child support from the total payment amount. The resulting balance can be claimed as income. Although child support is not considered income by the Internal Revenue Service guidelines, you may need to report it to other government agencies. Applications for state assistance, such as Medicaid, require you to claim all sources of income for any household member.
  
  

Paying Child Support

• If you are paying child support, the payments cannot be deducted from your income. When filing taxes, you must report your gross monthly income even if your wages are garnished for child support. If you are applying for government assistance, you can deduct your child support obligation. Alimony payments made can be deducted from your income when filing taxes.
  
  

Claiming Dependents

• Parents can receive a break on their taxes by claiming dependent children. Only one parent is able to claim a minor child as a dependent. A divorce decree or separation agreement may specify which parent is legally able to claim the dependent. Some non-custodial parent are under the misconception that they are entitled to claim the child because they pay child support. According to the IRS guidelines for dependency, the parent claiming the child must provide more than 50 percent of the child's support. Since child support is designed to be equal, it can be a ineffective when determining which is entitled to claim a child. The IRS requires parents to also pass a residency test. If support is equal, whichever parent the child lives with more than half the year is allowed to claim the child.
  
  

Child Tax Credits

• The Child Tax Credit can be worth up to $1,000 per qualifying child. Only one parent is eligible to claim the child tax credit in a tax year. As an IRS rule, the parent must claim the child as a dependent to be qualify for the child tax credit. The parent who receives child support payments is classified as the custodial parent and is generally eligible to claim the credit. The parent and child must pass a series of tests to determine eligibility for the credit. For example, the child must be age 16 or younger to qualify.