10 Dec Can I claim child support as a loss?
Q. My ex-husband committed suicide, leaving a back child support judgement of $62,000. Any chance I can claim this as a loss because I will never see a penny of what was owed to me?
A. We know this isn’t what you want to hear, but the answer is no.
Unlike alimony, child support has no effect on the taxes paid by either the person paying or receiving the funds, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.
The rules for alimony and taxes will change for divorces starting Jan. 1, 2019.
He said the only potential impact child support can play is on determining which parent has the right to claim the child or children as a dependent.
“The IRS requires that in order to be able to deduct a child as a dependent, you must have provided more than 50 percent of the costs associated with caring for that child,” he said. “Unless your divorce agreement called for a sharing or alternating of the dependent care deduction, I assume you claimed the child every year.”
If this is not the case, you may have the opportunity to amend the tax returns in which you allowed your ex to take the dependent deduction and he failed to pay the required child support, Gallo said.
So basically, there is no tax remedy available to you in regards to uncollected child support.
But your judgment has a valid claim against your ex-husband’s estate.
“Depending on his financial situation, you may be able to collect some or all of your $62,000 judgment from any assets he left behind or from life insurance policies he might have had,” Gallo said. “I would suggest that you contact an attorney for advice on how to go about filing your claim against his estate.”
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