Consider the following scenario: A divorced couple with a child. The father pays child support payments to the mother, and the mother pays for daycare for the child. In this scenario, the mother gets the child tax deductions, and the father gets no deductions, yet both are paying towards the raising of the child.

Not only that, if the mother declares the daycare expenses as a deduction on her tax return it can reduce her child tax benefits. So it is a better deduction for the other parent.

The solution is for the father to arrange to pay for the daycare for the child. Then he is able to get a tax deduction for the expense. He can arrange to reduce his child support payments by the amount of the daycare expenses to the mother. The net money going for supporting the child is still the same.

The tax deduction for the daycare expenses would often equal or exceed the amount that the mother gets, and there is no reduction of child tax benefits.

Comments

Thanks a bunch! Written by 'Guest' on 2006-04-21 18:28:46 I am currently considering bankruptcy due to the fact that my common law marriage recently broke up and I cannot pay all the bills that were all in my name. I am running a deficit of over $700 dollars/month without OT. I also pay child support.

I hope this works! Written by 'Guest' on 2006-11-30 16:49:13 The advice is much appreciated. On top of $900 per month in child support, I pay $700 of the $910 per month daycare charges, yet my daughters mother puts $5000 pre-tax per year in her flexible spending account towards daycare and then gets reimbursed that amount. I'm paying the bills and she gets all the pre-tax benefits. Since her pre-tax benefits on the daycare give her about $2000 per year savings, she isn't paying much of anything towards daycare.  I am taking my case back to court and insisting that I be allowed to pay daycare separately from child support. At least that way I get the pre-tax benefits for up to $5000 in daycare costs and she actually needs to pay something out of pocket for daycare.

Written by 'Guest' on 2010-02-08 14:24:18

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