Child support payments are not tax deductible by the payer and are not taxable income to the recipient. Paying child support does not necessarily entitle you to claim the child as a dependent for tax purposes (a dependency exemption). The Internal Revenue Service (IRS) rules dictate that the parent with whom the child spent the most nights during the tax year has the right to claim the child as a dependent. And if the child spends an equal number of nights with each parent during the tax year, the parent with the higher adjusted gross income (AGI) has the right to claim the child as a dependent. Sometimes the child custody court will order the parents to alternate years of claiming the child as a dependent.

In Colorado, as in all states, child support payments are not tax deductible for the payer and do not count as taxable income for the recipient. This is in accordance with federal tax laws. When it comes to claiming a child as a dependent for tax purposes, the IRS rules are that the custodial parent, defined as the parent with whom the child lived for the greater number of nights during the year, is typically entitled to the dependency exemption. If the child spends an equal amount of time with both parents, then the parent with the higher adjusted gross income (AGI) is entitled to claim the child as a dependent. However, it is possible for the non-custodial parent to claim the child as a dependent if the custodial parent signs a written declaration (IRS Form 8332) that they will not claim the child for the year, or if the divorce decree or separation agreement includes a provision for the non-custodial parent to claim the child and the other conditions set by the IRS are met. Additionally, a court order or agreement may allow parents to alternate the years in which they claim the child as a dependent. It's important to note that these rules are based on federal tax law, and while state law does not directly alter these rules, state child custody orders can influence the application of the federal rules.