13th Jul 25 7:47 am
JamieAccording to The Annie E. Casey Foundation, single parents across the United States receive billions in child support each year. The Administration for Children & Families also notes that 20% of all American children live in households that receive child support. For some families, these child support payments can be quite substantial. This is especially true for parents emerging from high-net-worth marriages, as courts may award child support to maintain high standards of living for children. Parents of all walks of life tend to ask the same question after divorce: Is child support taxable? This is something parents may wish to discuss with an experienced Colorado child support lawyer. Consider continuing this conversation with Colorado Divorce Law Group by calling (720) 593-6442.
Parents who pay child support may wonder if these expenses are tax-deductible. The answer is no. Child support is non-deductible, which means a paying parent cannot include it in their tax return. This may be particularly disappointing news for high-net-worth parents who pay significant sums each year in child support. However, one has to remember that non-divorced parents cannot write off daily expenses associated with raising their children, either.
Conversely, parents who receive child support may wonder whether they have to declare this “income” on their tax returns. However, child support is not “income” as far as the Internal Revenue Service (IRS) is concerned. Although the IRS might claim a portion of a paycheck, there is no need to pay tax on a child support payment. This may be encouraging news for parents who receive child support in Colorado – especially those who stand to receive tens of thousands of dollars per year (or month) after emerging from high-net-worth marriages.
The fact that child support has no tax implications for either parent clearly favors the recipient. Virtually all types of income are taxable in the United States, and child support represents a rare exception. On the other hand, the paying parent does not receive this favorable treatment from the IRS – which treats their child support payments like any other expenditures. While some might argue that this is not fair, it is the reality. Although paying parents cannot treat child support as tax-deductible expenses, they may be able to implement other strategies to limit the financial effects of divorce or separation. Colorado Divorce Law Group may be able to help parents assess and execute these strategies.
While direct child support payments are never tax-deductible, it may be possible to explore alternative strategies that may qualify for tax deductions. For example, some lawmakers in Colorado are trying to pass a bill (HB22-1203) that would provide income tax credits for nonpublic education (private school). While this bill has not yet passed, it might one day become a reality for many parents who wish to send their children to private schools. As a result, a parent might decide to cover these tuition costs directly instead of paying the full child support amount. In this situation, it may be possible for some indirect child support payments to become tax-deductible.
In 2024, a new IRS rule stated that tuition for specialized education geared toward disabled students is tax-deductible. In other words, direct child support payments for the tuition of special needs children could be tax-deductible. A paying parent should know that it may not be possible to make direct payments to schools without consent from the other parent. The other parent may prefer to receive child support payments directly, and this is the default arrangement in Colorado. However, mediation or collaborative law could allow parents to agree upon flexible child support arrangements – including setting aside a portion of the funds for direct payment of tuition or healthcare costs.
While there are virtually no tax implications associated with direct child support payments, parents may be able to take advantage of child tax credits. As the name implies, these tax credits are reserved for parents who take care of children. Colorado offers families numerous tax credits, including the Colorado Child Tax Credit. As of 2025, this tax credit provides up to $1,200 to families with children below the age of six. Colorado also offers the Family Affordability Tax Credit, which provides up to $3,200 to families with children below the age of 17. However, only parents with gross adjusted incomes of $75,000 or less may qualify for the Colorado Child Tax Credit. The threshold for the Family Affordability Tax Credit is $85,000 or lower. The federal government also offers its own child tax credits, and these credits can be worth up to $2,000 for each child (as of 2025).
Only one parent may claim these tax credits per year. If one parent has primary physical custody, only they can claim the tax credit, as the child stays with them more than 50% of the time. The situation becomes more complex for parents who share equal custody, however – and they may argue over who can claim the child tax credits. Sometimes, parents agree to alternate claiming the tax credit each year. In other situations, one parent agrees to forfeit the child tax credits in exchange for something else of value. These types of flexible deals may be finalized through mediated negotiations, collaborative law, or other forms of alternative dispute resolution (ADR).
Parents might face numerous tax implications after divorce or separation – and child support is only one potential issue to consider. While many ask “Is child support taxable?” Others might ask the same questions about alimony, property division settlements, and more. Parents who are concerned about tax implications should consider an in-depth conversation with a Colorado family law attorney. During this discussion, it may be possible to cover tax implications in more detail. Remember, each family is different – and distinct tax challenges may arise depending on the specific financial factors at play. Consider contacting Colorado Divorce Law Group at (720) 593-6442 for further dialogue.
