Cincinnati Family Law & Divorce Blog: What Are Some Differences Between Child Support and Spousal Support?
Child support and spousal support have different tax consequences. Child support is not tax-deductible to the payor and is not taxable income to the payee. Whereas, spousal support is tax deductible to the payor and is taxable income to the payee. One’s tax bracket determines the after tax impact of spousal support. For example, a man who is in a 25% tax bracket, will actually be paying 75 cents out of pocket for every dollar paid as spousal support. If the recipient is in a 20% bracket, she will be receiving 80 cents net for every dollar received. In this scenario, the IRS will receive 5% less in taxes than they would normally be entitled to. It is for this reason that divorce attorneys pay special attention to the manner in which child and spousal support are structured. Child support ends upon a child’s 18th birthday or graduation from high school,...