Could Your Extra Money Be Nontaxable?

Child Support

If you have children with someone who pays you support every month, note this income is not taxable, primarily because child support is money meant to go toward the support of your child rather than your income. While you might be able to use support as income when you file certain forms stating the income you receive every month or year, you are not required to pay taxes on this money. In fact, you often won’t even add it to the amount you’re earning when you file your taxes. The person paying child support does not benefit from this payment, either, and reports their income as it appears on their tax forms. It is illegal to subtract the amount of money paid to the parent of your child to reduce your own adjusted gross income. In short, if you receive support, it’s not income, and if you pay it, it’s not a deduction.

Continue reading to learn how to handle scholarships when it comes to taxes.