Taxes and Dependency Exemptions (Child Tax Credit)


The dependency exemption has been replaced by the child tax credit. The tax exemption directly reduced a parties’ taxable income. A credit reduces the parties’ tax liability. In other words, a dependent exemption is the income you can exclude from taxable income for each of your dependents (typically your children). Under the old tax code, parties could exclude $4,050 for each dependent. Now that number is $0, but, if eligible, parties may claim a child tax credit.

Taxes and Dependency Exemptions (Child Tax Credit)2019-01-01T12:03:49+00:00

Taxes and Spousal Support


Under the current IRS tax code, spousal support is tax deductible by the payor and taxable to the payee. This means that the person paying spousal support is paying pretax dollars, which they can then deduct on their annual return. In other words, people paying alimony under the current law can deduct those payments—no matter how big the amount—from their income before calculating what they owe in taxes. A change in the tax law will eliminate this tax break for spousal support orders that are finalized after December 31, 2018.

Taxes and Spousal Support2019-01-01T12:01:13+00:00

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