A friend and I were discussing "filing taxes" the other day and she said that a person who does not have an income from a job but does have an income from child support can file a tax return based on the money they received from the support. I said they can't because the taxes were already paid on that money by the parent that pays the child support. I really know nothing about how taxes and filing taxes works. So I'm hoping that someone will clarify our little friendly dispute so I can say... "Told you so." :) Not really. But I am very curious to know which is correct and why. For some reason I can't seem to stop wondering and thinking about it. Thanks for your help! Have a wonderful day!
2006-12-11 04:52:22 · 9 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I just called several Tax businesses and half told me there is no reason to file (there would be NO return) and half told me that someone in that position would receive a sizable return even without an earned income. I'm so confused! Keep the answers coming please. :) Thanks!
2006-12-11 05:31:20 · update #1
The child support recipient should file tax form anyway, as the income should be declared even if it is exempt from income tax (and I do not say that it is or not). Also, the recipient may be entitled to other credits not available if they do not file.
2006-12-11 04:55:25 · answer #1 · answered by kingstubborn 6 · 1⤊ 3⤋
Child support is not taxable to the recipient or deductible by the payer, and is not reported by either on a tax return. Alimony is different - the person receiving it has to pay taxes, and the person paying it can deduct it.
There's not even a place on the form to put child support, so there wouldn't be any way to file it. If that's her only income, she'd be sending in a form with all blanks or zeroes.
And you don't get a refund unless you had taxes withheld or are eligible for a credit like EIC - I have no idea what the person who's telling her she can get a big refund is thinking. The earned income credit can definitely return money to someone that they didn't have withheld, but that's only for people who have income from a job.
You can go ahead and say "I told you so", but why bother? She'll find out eventually.
There's a lot of misinformation out there about taxes, and a lot of it gets into answers here on Yahoo Answers, unfortunately.
2006-12-11 11:55:41 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Technically, anyone can file a tax return. It becomes 'pointless' to file if you do not benefit from it.
Filing a tax return and getting a refund are two different things.
So, technically speaking if you only are disagreeing about actually filing a return, your friend is correct - she CAN file a return.
If you were arguing about having income to claim and get a refund, then you are correct because your friend wouldn't benefit.
Child support is not taxable to the recipient and is not deductable to the person paying. HOWEVER, alimony IS taxable to the recipient and deductible to the person paying it.
If your friend truly had no income besides child support, I can't think of a single tax credit she could be eligible for. The only refundable credit (credit that gives you money beyond what you paid in) is EIC but without any earned income you can't claim it.
Even if your friend received alimony - it is taxable for her and she would need to file a return - but it is not earned income and wouldn't benefit her with a tax refund.
2006-12-11 11:10:02 · answer #3 · answered by nova_queen_28 7 · 2⤊ 0⤋
Wayne is correct that child support is not taxable. There is absolutely no reason to file a tax return if the only source of funds coming in is child support. If the person is receiving alimony, then the alimony is taxable to the recipient and deductible to the payor.
2006-12-11 07:49:50 · answer #4 · answered by jseah114 6 · 2⤊ 1⤋
You can't claim taxes on moneys that have already been taxed, so what would be the purpose? For instance, if I have a retirement account which I am investing money into and paying taxes on those moneys, why would I be taxed again when I have already paid my share of taxes? You can't get double taxed, as it does not make sense, nor would it happen.
2006-12-11 05:01:36 · answer #5 · answered by Anonymous · 0⤊ 0⤋
If the only source of "income" is child support then, no, a return need not be filed.
Child Support is not taxed and it does not qualify for any refundable credits.
2006-12-11 05:01:35 · answer #6 · answered by Wayne Z 7 · 2⤊ 1⤋
If the divorce is very final any time in 2009, no you won't be in a position to document a joint 2009 return. you will possibly each document as single, or in case you have a based, may well be waiting to document as head of family.
2016-10-14 11:23:10 · answer #7 · answered by ? 4 · 0⤊ 0⤋
You should file a return, sounds like you are missing the EIC credit. To the IRA post IRA contributions are taken with pre taxed dollars, you do not pay tax twice, but you do pay tax when you withdraw (the idea is that you should be in a higher tax bracket by then and thus pay more in tax).
2006-12-11 05:25:32 · answer #8 · answered by Paul B 2 · 1⤊ 3⤋
no the money goes to the parent and they are the one`s that have to claim taxes [ if the money was payable to that person then yes]
2006-12-11 04:59:42 · answer #9 · answered by Anonymous · 0⤊ 3⤋