Tax Tip of the Week*

CHILD SUPPORT VERSUS ALIMONY It is fairly common in divorce actions that the higher earning spouse will be obligated to pay both alimony and child support. For instance, think in terms of $3,000 a month alimony plus $1,000 a month child support. What happens sometimes is that the entirety of the payments are not made – perhaps a couple of months are skipped, or a few months are shortchanged. When that happens, the tax law is clear that monies are treated as first being for child support (meaning not deductible by the payor and not taxable to the recipient); and then only after that year’s child support obligation is met is the remainder allowed to be treated as alimony.