Filing Status: Filing a joint return will result in the lowest taxes. If so, both you and your spouse are responsible for the entire tax liability.
Exemptions: Child does not live with you? Can claim deduction ONLY by agreement or order of court if in the best interest of the child for the non-residential parent to claim the child as a tax dependency exemption.
Liabilities and Refunds: Usually treated as joint property and are typically shared equally among the parties.
Tax implications of child support and alimony
Alimony is taxable to the recipient and deductible by the payer. Child support is neither taxable nor deductible.
Getting a Divorce? What about your insurance issues?
Health Insurance: After a Massachusetts divorce, the spouse with the employer-provided health insurance plan may no longer be able to provide coverage for the former spouse. A divorce will usually cause the dependent spouse to lose his or her healthcare coverage.
What will the judge do if we don’t settle?
If the court determines that the paying spouse (the “obligor”) has insurance or available coverage, most judges will normally order that the obligor either (a) exercise the option of additional coverage in favor of the spouse or (b) obtain coverage for the spouse, or reimburse the spouse for the cost of health insurance.
What about health insurance for the children?
The Massachusetts statute provides that “When the court makes an order for maintenance or support of a child, said court shall determine whether the obligor under such order has health insurance or other health coverage on a group plan available to him or her through an employer or organization or has health insurance or other health coverage available to him or her at a reasonable cost that may be extended to cover the child for whom support is ordered. When said court has determined that the obligor has such insurance or coverage available to him or her, said court shall include in the support order a requirement that the obligor exercise the option of additional coverage in favor of the child or obtain coverage for the child.”
If you are paying child support (or alimony), most courts will order you to maintain a life insurance policy naming the other parent as beneficiary on behalf of the children.