Final answer:
No, child support payments should not be included in gross income. Child support is not taxable income according to the IRS and is separate from other types of support like alimony. It is designed to assist with the financial needs of the child.
Step-by-step explanation:
No, child support payments should not be included in gross income. According to the Internal Revenue Service (IRS), child support is not considered taxable income. It is not subject to federal income tax, and it also cannot be claimed as a deduction by the parent who pays it.
Child support is designed to assist with the financial needs of the child. It is separate from other types of support, such as alimony, which may be considered taxable income for the recipient.
For example, if a taxpayer received $1,000 in child support payments throughout the year, they would not include this amount in their gross income for tax purposes.
The statement that child support payments should be included in gross income is false. Child support payments are not taxable income and should not be included when calculating gross income for tax purposes.
The recipient of child support does not declare these payments as income, and the payer does not get to deduct these payments.
In relation to other tax credits and assistance programs such as the earned income tax credit (EITC), child tax credit (CTC), and the Temporary Assistance for Needy Families (TANF) program, these do impact federal outlays or loss of tax revenues but operate differently compared to child support payments.