What to Know About Child Support & Taxes in Washington State

In Washington state, child support is designed to financially assist with raising children after separation or divorce. But how does it impact taxes?

Child Support Is Not Taxable

Child support is considered a transfer of resources between parents, not income for the receiving parent. This means the IRS doesn't see it as taxable income.

The custodial parent can still claim the child as a dependent on their tax return. This can translate to tax benefits like the Child Tax Credit, offering additional financial support for raising the child.

In some cases, parents may alternate claiming the child as a dependent on their tax returns. This alternating would only be an option for parents with a joint custodial arrangement. This is something to discuss and potentially include in your child support agreement.

Child Support Arrears Can Lead to the Loss of Your Tax Refund

Tax season is often a time for anticipation, as you are hoping for a nice chunk of change to come your way. But your tax refund might take an unexpected detour if you have outstanding child support payments.

Many states, including Washington, have programs that allow them to intercept your tax refund and apply it toward your child support arrears. This can be surprising and frustrating, especially if you were counting on that money.

Here's how it works: The state child support enforcement agency shares information with the federal government about parents who are behind on payments. When you file your tax return, the IRS checks your information against this database. If there's a match, your refund gets flagged for interception. The amount withheld will depend on how much child support you owe, but the state can take your entire refund if necessary.

It's important to note that this doesn't just apply to federal tax refunds. Many states also have their own tax offset programs that can take your state tax refund as well. So, even if you get a federal refund but owe the state back child support, you might still see a smaller payout than expected.

If you find yourself in this situation, there are a few things you can do. First, contact your child support agency right away. They may be able to work out a payment plan to help you catch up on your arrears. There might also be options to dispute the offset, especially if you believe there's an error.

You should also consider reaching out to an attorney. They can discuss your legal options with you and, if your circumstances have changed substantially, help you file for modification.

While a modification of orders will not change your arrears, it can help you avoid getting further behind. By being proactive, you can potentially minimize the impact on your tax refund and get back on track with your child support obligations.

Experienced Counsel in Custody Cases

McKinley Irvin has represented clients in Seattle, Bellevue, Everett, and the surrounding areas since 1991. Known for our dedication to excellence, we are trusted by our past and current clients to offer comprehensive, personalized counsel. If you are considering a parenting plan or support modification, our team can help. Get in touch to schedule a consultation, or call (206) 397-0399.