I feel like I asked this a long time ago, but I'm senile
so I'll ask again:
Once child support is in writing...it isn't court-ordered, but was agreed upon for our divorce, and a judge will sign our papers soon....is that considered part of my income? As in: Someday I'd like to buy a house...can I count the child support as part of my income? It certainly would make a huge difference.
It is up to you if you'd like it to be considered income- at least on all of the credit applications I've filled out. I've never applied for a mortgage so I couldn't speak to that...
Yep, you can choose to include it in your "income" for the mortgage application (and if you were paying CS, would have it deducted, usually), but you might be asked to prove that you actually recieve it before the bank will let you claim it on your application.
I was going to use our old CS agreement for a mortgage app last year, but the bank wanted to see copies of my bank statements to prove that I was actually getting the money, so I couldn't do it. (I stopped asking for cs years ago, but still have all the old paperwork)
As for getting aid (even financial aid for school), they usually ask about it, but if you aren't actually getting it, often you don't have to report it. My school fin-aid doesn't consider CS in the calculation because I don't actually get it, etc. I think food stamps and such work the same way - the flip side is that you have to tell them every time you end up getting money from the ex and that can make your benefits fluctuate.
Like if I were to apply for assistance (being the father) would I still have to count my child support payments as income?
Yep. CS paid out is not taken into account as a liability/expense. Ever. You receive that money, you have that money, is the idea. It's kind of bizarre.
ep, you can choose to include it in your "income" for the mortgage application (and if you were paying CS, would have it deducted, usually),
Sorry, but no it isn't. You cannot deduct child support from reported income on your taxes, mortgage apps, etc., it's a federal law.
there are a very few exceptions that are complicated, having to do with super-low income and special circumstances, but in the vast majority of cases the payer of CS is not allowed to consider CS as a financial obligation on applications the way they would, say, an outstanding car loan.
Originally Posted by MamaNosBest Like if I were to apply for assistance (being the father) would I still have to count my child support payments as income?
Yep. CS paid out is not taken into account as a liability/expense. Ever. You receive that money, you have that money, is the idea. It's kind of bizarre.
ep, you can choose to include it in your "income" for the mortgage application (and if you were paying CS, would have it deducted, usually),
Sorry, but no it isn't. You cannot deduct child support from reported income on your taxes, mortgage apps, etc., it's a federal law.
there are a very few exceptions that are complicated, having to do with super-low income and special circumstances, but in the vast majority of cases the payer of CS is not allowed to consider CS as a financial obligation on applications the way they would, say, an outstanding car loan.
Receivers of CS can claim or not, as they choose.
On a mortgage application, there is a section where the borrower is asked if they owe child support and/or alimony. It is counted as a debt against the borrower.
If a borrower chooses to use child support as income, it (ususally) is verified via cancelled checks and/or direct deposit statements.
Yes, you are correct: CS is counted against the payer for loan apps and against the payer for the IRS, which means not as income for loan apps and AS income for IRS/tax purposes.
I just completed my mortgage application last week. Yes, they count child support as income. Yes, I had to provide a copy of the divorce decree and bank statements showing he actually paid.
No, the IRS doesn't tax you on received child support, only on spousal support or alimony.
Originally Posted by MamaNosBest
Yes, you are correct: CS is counted against the payer for loan apps and against the payer for the IRS, which means not as income for loan apps and AS income for IRS/tax purposes.
That's what I was trying to say
You have to remember that there's a huge difference between "taxable income" and "disposable income" - the IRS cares only about "taxable income" - which never includes cs - it's not a deduction for the payer nor income for the receiver. It's off the IRS/tax radar completely.
Banks really only care about "disposable income" - what's left after you pay all your other bills - so CS counts as income for the receiver and an expense for the payer.
In Canada it is not considered taxable income, but you can claim it as income for morgatges, loans etc.
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