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 Nebraska, as in all states, child support payments are not tax deductible for the payer and do not constitute taxable income for the recipient. This aligns with federal tax law, which is governed by the Internal Revenue Service (IRS). The IRS rules state that the right to claim a child as a dependent for tax purposes typically goes to the custodial parent, defined as the parent with whom the child lived for the greater number of nights during the year. However, if the child spends an equal amount of time with both parents, the IRS will consider the parent with the higher adjusted gross income (AGI) as having the right to claim the dependency exemption. It is also possible for a state child custody court to issue an order allowing parents to alternate the years in which they claim the child as a dependent. Such court orders should be followed, but they must also be consistent with IRS regulations, which may require the custodial parent to sign IRS Form 8332 to release the exemption to the non-custodial parent.