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Tampa Divorce Lawyer Discusses Tax Implications of Support Orders

Before long, many Floridians will be sharpening their pencils and pulling out the calculators in an attempt to figure out their yearly tax returns. With that said, our Tampa divorce lawyer wanted to spend a few moments talking about the tax implications posed by alimony and child support orders. Let’s start with alimony and move on from there.

In the State of Florida, the person receiving the alimony must count it as income. As such, he or she must pay taxes on the amount received each year. On the other hand, the person ordered to make payments can deduct them from his or her taxes. There is also the recapture rule to consider. That is why some divorcing couples choose to request their alimony awards in lump sum payments as opposed to periodic ones.

Child support orders, not surprisingly, are looked at a lot differently in the Sunshine State. The money is not taxed and the payee can’t claim it on his or her tax return either. However, the custodial parent may apply for the Earned Income Tax Credit. The non-custodial one is generally not eligible for the tax credit unless certain conditions apply. For example, maybe the custodial parent agreed to complete a tax form known as No. 8332 or spent more time than usual with the non-custodial parent.

It should also be mentioned that if the non-custodial parent is behind on his or her payments, both state and federal tax refunds may be intercepted by the controlling child support office and applied to the outstanding debt as they see fit. As such, just because a tax refund check was intercepted doesn’t mean that the non-custodial parents can skip or adjust his or her normal, monthly payment accordingly.

To learn more about the tax implications of support awards ordered by the State of Florida, please contact our Tampa divorce lawyer today.