Family support payments may be tax-deductible

If you’re paying alimony, you can deduct that amount on your income taxes. Child support payments, on the other hand, are not deductible. But sometimes there are in-between situations that are harder to figure out.

For example, while a California couple’s divorce was pending, the husband made “family support” payments to his wife and children under to a temporary court order. When he filed his tax return, he deducted the $24,500 in support payments he had made that year.

The IRS challenged the deduction. It claimed the payments weren’t deductible as alimony, because alimony payments aren’t deductible unless they terminate automatically if the spouse receiving them dies.

But the U.S. Tax Court sided with the husband. It said that under California law, the husband could legally have stopped making the payments if the wife had passed away.

The court also said that the payments didn’t count as child support because there wasn’t a fixed portion that was designated specifically for the kids.