How are support payments treated under Federal income tax rules?
Child support payments are typically not deductible from the income of the payer and are not included as taxable income to the supported spouse. Alimony or spousal support payments are tax deductible by the payer and taxable income to the supported spouse. According to the Federal Internal Revenue Code, ” … any payment which the terms of the divorce or separation instrument fix (in terms of an amount of money or a part of the payment) as a sum which is payable for the support of children of the payer spouse” is not considered alimony or a separate maintenance payment. Thus, such payments are a tax neutral event (they are non-taxable to the person receiving them and non-deductible to the person making them). Federal Income Tax Regulations state: “A payment is fixed as payable for the support of a child of the payer spouse if the divorce or separation instrument specifically designates some sum or portion (which sum or portion may fluctuate) as payable for the support of a child of the
