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Are child support and alimony taxable?

Photo of Karen Lavin

Divorce is one of those things that seems to touch every area of life, whether you expect it o or not. One area that you will need to pay special attention to following a divorce is how you budget for and prepare your taxes. Taxes affect child support payments and alimony differently, and should be approached carefully. While it is always wise to consider having your taxes prepared by a tax professional, a general understanding of how taxation is leveed against child support and alimony for both spouses can help you plan well.

When it comes to making child support payments, taxation is sort of a "good news, bad news" situation. The good news is that understanding it is very simple. The bad news is that you might not like it. Child support payments are not tax deductible, end of story. On the other side, money that is received as child support from another parent is not taxable.

Alimony payments are a bit more complicated. Alimony payments that are made under a divorce decree are considered tax deductible, even if you do not itemize deductions. If you make alimony payments voluntarily that are above and beyond what is laid out in a decree, these are unfortunately not tax deductible.

For those who receive alimony, it is important to know that alimony is taxable, but is not subject to withholding. This means you may need to increase what is withheld from your regular wages to avoid owing taxes in come filing time, or else set aside extra savings to account for anticipated tax obligations.

Divorce is complicated, but it doesn't have to be devastating. If you are anticipating a divorce, or currently walking through one, the guidance of a good lawyer can help make sure that you navigate this complex process with dignity while protecting your rights in Illinois.

Source: The Chicago Defender, "Tax Effects of Divorce," Constant W. Watson III, Sep. 09, 2016

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