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Basic Tax Issues in Divorce

There are three major areas in which taxes can effect a divorce resolution. These are Spousal Maintenance, Child Support, and Child Dependency.

Spousal Maintenance

Spousal maintenance paid by an individual is a tax deduction. While spousal maintenance received by an individual is considered income to that individual and they must pay taxes on it. Each of these tax effects can have a significant impact on an individual’s finances and should be considered while trying to resolve a dissolution.

Child Support

Child support is neither a tax deduction nor taxable income for an individual.

Child Dependency

The general rule is that the individual who has the minor child the majority of the calendar year claims the minor child for income tax dependency. However, it is common and the Court has the power to order, that the parties share in the income tax dependency (i.e. alternate or each individual claim one, etc.) If you have questions related to any of these issues, please do not hesitate to contact our office at (952) 224-9410.