Question

Mason and Janet were divorced in 2015. Their daughter Kelly lives with Mason, and Janet pays $650 per month of child support. Which of the following statements are true?

Answer 1

The choices are:

a. Mason must claim the child support as income.

b. Janet can deduct the child support as an adjustment to income.

c. The child support is income received by the child and provided for her own support.

d. Child support payments received are not taxable income, and child support paid is not a deductible expense.

Answer:

The answer is letter d.

Explanation:

Under the Internal Revenue Code (IRC), "child support" is not considered as an income of the parent nor is it considered an income of the child. It is not part of a person's gross income. It is also non-deductible, which means that Janet cannot deduct the child support as an adjustment to income.

Child support payments are non-taxable as well. This means that tax will not be deducted from it, since it is a personal expense. It is not classified under any tax-deductible situations.

Only an "alimony" (this is the provision or the obligation that you will be supporting your spouse before or after divorce) is tax-deductible.

Remember that child support cannot be classified as an alimony.

Thus, this is the reason why letter d is the answer.