IRS Tough When Child Support Upon Divorce Disguised as Alimony – Child Contingency Rule Steadfast

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This article only applies to divorced or divorcing spouses whose alimony award was established, pursuant to a Property Settlement Agreement (PSA), and/or the spouses were officially divorced, on or before December 31, 2018.
Child Contingency Rule
The US Tax Court, in the recent case of Johnson v. Commissioner, T.C. Memo 2014-67 (April 14, 2014), has cleared up some misunderstandings regarding the IRS’s Child Contingency Rule.

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Child Support Income Determinations – Virginia Divorce

For purposes of calculating Child Support in a Virginia divorce, gross income is what is used (not net, not AGI, nor anything else). The term “gross income” is very broadly interpreted. It includes, but is not limited to:

Salaries
Wages
Commissions
Royalties
Bonuses
Dividends
Severance Pay
Pensions
Interest
Trust Income
Annuities
Capital Gains
Social Security Benefits (can be complicated)
Workers Compensation Benefits
Unemployment Insurance Benefits
Disability Insurance Benefits (can be complicated)
Veterans Benefits
Spousal Support received
Rental Income
Gifts
Prizes
Awards

Gross income does NOT include:

Benefits from most Public Assistance programs
SSI benefits
Child Support received
Income received by payor for secondary employment where that income is being obtained specifically to discharge a child support arrearage established by a court or administrative order and the payor is actually paying that arrearage.