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 New York, as in all states, child support payments are governed by both state statutes and federal tax law. According to the IRS, child support payments are neither deductible by the payer nor considered taxable income for the recipient. This means that the parent who pays child support cannot reduce their taxable income by the amount of child support paid, and the parent who receives child support does not have to report it as income. When it comes to claiming a child as a dependent for tax purposes, the IRS rules stipulate that the custodial parent, defined as the parent with whom the child spent the most nights during the year, is typically entitled to the dependency exemption. If the child spends an equal amount of time with both parents, the parent with the higher adjusted gross income (AGI) is generally given the right to claim the child as a dependent. However, a child custody court in New York can order parents to alternate the years they claim the child as a dependent, which overrides the standard IRS rules. This arrangement should be reflected in the custody agreement and the non-custodial parent would need to file IRS Form 8332 if they are claiming the child in a given tax year.