Are child support payments considered taxable income?

There are more and more calls coming into tax resolution firms concerning child support issues. Even if clients call in for other issues, somewhere in the tax consultation it still comes up more often than not.

I hate to break it to clients but the answer to the question is no. Child support payments are neither deductible by the payer nor taxable to the payee. Child support payments cannot be considered when calculating if you have enough income to be required to file, either. A lot of clients have made the mistake of adding the total of the money paid to child support and deducting it from their total gross income. This is also done in the reverse. If you add child support money to your gross income you are not accurately assessing your filing requirement.
Clients call in thinking they only have a certain amount of years to file and are rudely awakened to find out otherwise.

I had a client today who was wondering why he didn't get a refund for three years. After doing some home work by doing a practitioner call, I discovered through another senior tax consultant that if a client owes child support they are in a position to get their refund taken. It actually happens all the time. So if you're a deadbeat Dad or Mom and you think Uncle Sam is gonna let you slide, think again!