Is Child Support Considered Income in California?

Hossein Berenji, Dec 21, 2022

It is wise to consider future tax implications when you negotiate a divorce settlement. The terms of your settlement agreement could impact your future tax returns. However, most individuals who divorce now in California do not need to worry about support being taxed as income.

Is Child Support Taxable as Income in California?

According to the Internal Revenue Service (IRS), child support payments are not taxable as income for the recipient. Furthermore, child support is not considered a deductible for the payer. In other words, neither parent is required or able to claim child support payments on their individual income tax returns.

Parents have a responsibility to support their children financially, even if the parents do not live with the child. Child support in California is based on a statewide child support calculator. Two significant factors determining child support payments in California are:

  • The income for both parents; and,
  • The amount of time the child spends with the custodial parent and a non-custodial parent.

Income for child support includes wages, bonuses, tips, salaries, and overtime pay. In addition, it includes retirement, disability, unemployment, investment, and self-employment income. Rental income is also included in child support calculations.

The above examples are not a complete list of income counted in child support calculations. Instead, they are examples of common sources of income parents must report for child support purposes.

Are Spousal Support Payments Considered Income in California?

Whether spousal support or alimony is reported as taxable income is a bit more complicated. Changes in the tax law require individuals to review the date of their divorce or separation to determine whether to count spousal support as income.

If your divorce or separation agreement is dated on or before December 31, 2018, the payer can deduct alimony payments on their tax returns. Recipients of spousal support report the payments as income on their individual tax returns.

However, if the divorce or separation agreement is dated January 1, 2019, or after, the alimony payments are not reported as income or deductible from gross income. The new law may also apply to modifications of divorce or separation agreements executed before the law became applicable. The modification must state the repeal of the alimony deduction and that income reporting applies to the modification.

What Should I Do if I Have Questions About Child Support or Spousal Support and Taxes?

Your Beverly Hills divorce lawyer can provide some direction regarding issues related to support payments. However, they might direct you to contact your tax professional for guidance. Support payments might or might not be counted for other government programs or assistance.

What Should I Do if My Child Support Payments Are Incorrect?

Talk with a Beverly Hills child support attorney if you believe you are paying too much for child support or receiving less than you are entitled to receive. Child support payments might change over time. The court might modify support payments based on a substantial change of circumstance.

You must petition the court requesting a change in child support payments. As the petitioner, you have the burden of proving a substantial change in circumstances justifies modifying child support payments.

Examples of a substantial change in circumstances that could result in modifying the amount of child support include:

  • The child’s needs have changed regarding their education, health care, child care, or other necessary expenses
  • A parent loses their job and has been unable to find new employment within a reasonable time
  • The income of one or both parents has changed since the court entered the current child support order
  • There has been a significant change in the amount of time the child spends with each parent
  • A parent had another child with another person

Any changes in the factors used to calculate child support payments could be grounds for modifying a child support order. The best way to determine if you have grounds for changing your child support payments is to talk with a lawyer.

Can I Request To Modify Child Support Payments Retroactively?

Unfortunately, the court will not modify the support payments retroactively. It will only order a modification of payments from the date you file a motion to modify with the court. Therefore, it is essential to act quickly if you believe a change justifies increasing or decreasing your child support payments.

Gather together as much information as possible to give to your lawyer. Examples of evidence include current pay stubs, tax returns, and other evidence of income. If you lost your job or became disabled, provide a copy of the letter stating how much your benefits are per week.

When the change involves the other parent’s situation, you might not have access to documents or information. A lawyer can help you determine if you should file a motion seeking this information based on your current information.

Contact the family and divorce law firm of Berenji & Associates for help today.

If you’re going through a divorce, you need a strong team on your side fighting for your rights. Call Berenji & Associates today to know how we can assist you.

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