Is Child Support Taxable in Vermont? Complete 2026 Tax Guide

By Antonio G. Jimenez, Esq. | Florida Bar No. 21022 | Covering Vermont divorce law

Child support payments in Vermont are not taxable to the receiving parent and not tax-deductible for the paying parent under IRS Publication 504 and 26 U.S.C. § 71(c). This federal rule has applied uniformly since 1984 and governs all Vermont child support orders issued under 15 V.S.A. § 656. Whether you pay $400 or $4,000 per month, the tax treatment is identical: support flows tax-free.

Key Facts: Vermont Child Support and Taxes (2026)

As of April 2026. Verify with your local clerk.

Is Child Support Taxable in Vermont?

Child support is not taxable in Vermont. Under 26 U.S.C. § 71(c) and IRS Publication 504, child support payments are excluded from the recipient parent's gross income and cannot be deducted by the paying parent. This rule applies to 100% of child support ordered under 15 V.S.A. § 656, regardless of whether payments are $200 monthly or $5,000 monthly.

The federal tax treatment of child support has remained unchanged since the Deficit Reduction Act of 1984. Vermont follows this federal rule because Vermont Form IN-111 begins with federal adjusted gross income. If a payment is not included in federal AGI, it does not appear on Vermont's state tax return either. This means a custodial parent in Burlington receiving $1,200 per month ($14,400 annually) pays zero state or federal income tax on that support. Conversely, a non-custodial parent in Rutland paying the same amount receives no federal or Vermont state deduction for those payments.

The distinction matters because alimony orders entered before January 1, 2019 followed the opposite rule: deductible to payer, taxable to recipient. The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the alimony deduction for divorces finalized on or after January 1, 2019, bringing alimony tax treatment closer to child support's long-standing rule.

How Vermont Calculates Child Support in 2026

Vermont uses the Income Shares Model under 15 V.S.A. § 656, which calculates support based on the combined gross income of both parents. The Office of Child Support publishes guideline tables that determine the total obligation, then divides it proportionally. For example, if parents earn $60,000 and $40,000 respectively ($100,000 combined) with two children, the guideline obligation is approximately $1,650 per month, split 60/40.

Vermont Family Court Rule 4 and the Vermont Child Support Guidelines incorporate the Income Shares Model into every support calculation. The calculation uses gross income (before taxes), adds qualifying work-related childcare costs, adds the child's share of health insurance premiums, then divides the total by each parent's percentage share of combined income. Courts may deviate from guideline amounts under 15 V.S.A. § 659 if strict application would be unjust, but deviations must be stated in writing. In 2024, Vermont updated its guideline tables to reflect higher cost-of-living figures, increasing baseline obligations by approximately 8% for families earning $50,000 to $150,000 combined.

Child support continues until age 18, or age 21 if the child remains in high school under 15 V.S.A. § 658. Vermont does not require post-secondary education support absent a written agreement.

Who Claims the Child on Taxes After a Vermont Divorce?

The custodial parent claims the child as a dependent by default under IRC § 152(e), even if the non-custodial parent pays 100% of child support. The custodial parent is defined as the parent with whom the child lived for the greater number of nights during the tax year. This default rule determines eligibility for the Child Tax Credit (up to $2,000 per qualifying child in 2026) and Earned Income Tax Credit.

Vermont courts commonly address dependency exemptions in the final divorce decree under 15 V.S.A. § 659. Parents can agree, or a judge can order, to alternate the dependency claim annually or assign it to the higher-earning parent. To legally transfer the claim, the custodial parent must sign IRS Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) and the non-custodial parent must attach it to their federal return. Without Form 8332, the IRS will reject a non-custodial parent's dependency claim regardless of what the Vermont divorce decree states.

For 2026, the Child Tax Credit remains $2,000 per qualifying child under age 17, with up to $1,700 refundable as the Additional Child Tax Credit. The credit phases out at $200,000 modified AGI for single filers and $400,000 for joint filers. Only one parent may claim the credit in any given year.

Child Support Tax Deduction Myths Explained

No child support tax deduction exists under federal or Vermont law. Despite persistent myths, there is no way to deduct child support payments from taxable income. The IRS explicitly states in Publication 504 that "child support payments are neither deductible by the payer nor taxable to the recipient." A Vermont parent paying $18,000 annually in child support receives zero federal deduction and zero Vermont state deduction.

Three common misconceptions cause confusion. First, some parents confuse child support with alimony. Alimony ordered before January 1, 2019 was deductible, but the Tax Cuts and Jobs Act eliminated this treatment for all divorces finalized on or after that date under IRC § 215. Second, some parents believe they can deduct child support as "support of a dependent." This is incorrect — the dependency exemption was eliminated by the TCJA through 2025 and replaced by the Child Tax Credit, which the custodial parent typically claims. Third, some parents try to characterize child support as unreimbursed childcare. Childcare credits under IRC § 21 apply to work-related expenses only, not to court-ordered support payments.

If you are audited, the IRS will review your Vermont divorce decree and the amount actually paid through the Vermont Office of Child Support registry at 103 South Main Street in Waterbury.

Vermont Divorce Filing Requirements and Costs

Filing for divorce in Vermont costs $295 as of April 2026, plus a $35 service fee if the sheriff serves papers. Under 15 V.S.A. § 592, at least one spouse must reside in Vermont for six months before filing, and twelve months before the court enters a final decree. Petitioners file a Complaint for Divorce in the Family Division of the Vermont Superior Court in the county where either spouse resides.

As of April 2026, verify filing fees with your local clerk. The $295 fee applies in all 14 Vermont counties — Addison, Bennington, Caledonia, Chittenden, Essex, Franklin, Grand Isle, Lamoille, Orange, Orleans, Rutland, Washington, Windham, and Windsor. Parents with minor children must also file a proposed Parenting Plan and Child Support Affidavit (Form 813) disclosing income, expenses, health insurance costs, and childcare costs. Fee waivers are available for parents earning below 150% of the federal poverty line by filing Form 228 (Application to Waive Filing Fees).

Vermont requires a 90-day waiting period between service of the complaint and the final hearing under Vermont Rule for Family Proceedings 4.2. No-fault grounds under 15 V.S.A. § 551(7) require parties to live separately for six consecutive months. Fault-based grounds include adultery, intolerable severity, and willful desertion for seven years.

How Vermont Child Support Affects Federal Tax Filing

Child support does not appear anywhere on a Vermont parent's federal tax return. The recipient does not report it as income on Form 1040. The payer does not deduct it on Schedule 1. This contrasts with alimony ordered before 2019, which appeared on Form 1040 line 2a for recipients and Schedule 1 line 19a for payers.

Filing status changes significantly after a Vermont divorce. A custodial parent who pays more than half the cost of keeping up a home and has a qualifying child living with them for more than half the year can file as Head of Household under IRC § 2(b). Head of Household status offers a $21,900 standard deduction for 2026, compared to $14,600 for Single filers — a $7,300 advantage. A non-custodial parent in Vermont typically files Single, even if they pay substantial child support, unless they have another qualifying dependent.

The Earned Income Tax Credit (EITC) follows the qualifying child. For 2026, a single Vermont parent with one qualifying child can claim up to $4,328 in EITC if earned income falls between $12,390 and $49,084. Vermont also offers a state EITC equal to 38% of the federal credit, adding up to $1,645 in state tax benefits.

Modifying Child Support Orders in Vermont

Vermont parents can modify child support when a real, substantial, and unanticipated change in circumstances occurs under 15 V.S.A. § 660. A 10% or greater change in the guideline obligation creates a rebuttable presumption that modification is warranted. Modifications are not retroactive beyond the filing date of the motion.

Common grounds for modification include: loss of employment (at least 90 days), a 15% change in either parent's income, a change in the child's medical or educational needs exceeding $200 per month, a change in parenting time of 25% or more, or the child reaching emancipation. The process starts by filing a Motion to Modify Child Support (Form 802) with the Vermont Family Court and paying a $90 motion fee. The Office of Child Support can also initiate modifications every three years on its own motion.

Modified orders do not change the tax treatment of support. Whether the amount increases from $800 to $1,200 or decreases from $1,500 to $950, child support remains non-taxable to the recipient and non-deductible to the payer. The only tax consequence of modification is potential reallocation of the dependency claim if the parents negotiate a new Form 8332 arrangement as part of the modification.

Tax Refund Intercepts for Vermont Child Support Arrears

The Vermont Office of Child Support can intercept federal and state tax refunds to collect past-due child support under 42 U.S.C. § 664 and 15 V.S.A. § 798. Federal tax refunds are intercepted when arrears reach $500 for non-TANF cases or $150 for TANF cases. In 2024, Vermont intercepted approximately $4.3 million in tax refunds across roughly 3,800 cases.

Intercepted refunds are applied first to current support, then to arrears, then to interest. The Treasury Offset Program sends notice 30 days before intercepting a refund, giving the non-custodial parent time to contest the amount. A new spouse's share of a joint refund can be protected by filing IRS Form 8379 (Injured Spouse Allocation). Vermont state tax refunds are intercepted by the Department of Taxes when arrears exceed $150, regardless of TANF status.

Child support arrears also trigger credit bureau reporting when the balance exceeds $1,000, denial or revocation of passports when arrears exceed $2,500 under 22 U.S.C. § 2714A, suspension of Vermont driver's licenses and professional licenses, and liens against real property. These enforcement tools do not change the underlying tax treatment — intercepted payments remain non-taxable to the recipient.

Frequently Asked Questions

Is child support taxable income in Vermont?

No. Child support is not taxable income in Vermont or under federal law per 26 U.S.C. § 71(c) and IRS Publication 504. A Vermont parent receiving $1,500 monthly ($18,000 annually) reports $0 of that amount on their federal Form 1040 or Vermont Form IN-111. This rule has applied uniformly since 1984.

Can I deduct child support on my Vermont taxes?

No. Child support payments are not deductible on federal or Vermont state tax returns. A paying parent in Vermont cannot claim a deduction regardless of the amount — whether $300 monthly or $5,000 monthly. This differs from pre-2019 alimony, which was deductible. The Tax Cuts and Jobs Act did not change child support's tax treatment.

Who claims the children on taxes after a Vermont divorce?

The custodial parent claims the children by default under IRC § 152(e), defined as the parent with whom the child lived more than 183 nights during the tax year. Vermont divorce decrees often alternate the claim between parents, but the non-custodial parent must attach IRS Form 8332 signed by the custodial parent to claim the credit.

How much is child support in Vermont?

Vermont uses the Income Shares Model under 15 V.S.A. § 656. For combined parental income of $100,000 with two children, the guideline obligation is approximately $1,650 per month. A single parent earning $40,000 with one child typically receives between $500 and $900 monthly, depending on the other parent's income and parenting time share.

What is the filing fee for divorce in Vermont?

The filing fee for divorce in Vermont is $295 as of April 2026. Add $35 for sheriff service and $90 for motion fees if modifications are needed later. Parents earning below 150% of federal poverty can file Form 228 to waive fees. Verify current fees with your local Vermont Family Court clerk before filing.

Does receiving child support affect my EITC in Vermont?

No. Child support does not count as earned income for the Earned Income Tax Credit. A Vermont parent with one qualifying child can claim up to $4,328 federal EITC in 2026, plus 38% of that amount ($1,645) as a Vermont state EITC. Child support received does not reduce EITC eligibility.

How long does child support last in Vermont?

Child support in Vermont continues until the child turns 18, or 21 if the child remains enrolled in high school under 15 V.S.A. § 658. Vermont does not require parents to pay college expenses absent a written agreement. Support terminates automatically upon emancipation, marriage of the child, or the child entering active military service.

Can back child support be taxed in Vermont?

No. Back child support (arrears) receives the same tax treatment as current support: non-taxable to the recipient and non-deductible to the payer. A Vermont parent who receives a $20,000 lump-sum arrears payment reports $0 on their tax return. Interest on arrears at 12% annually under 15 V.S.A. § 606 is also non-taxable to the recipient.

Does the Vermont Office of Child Support report payments to the IRS?

No. The Vermont Office of Child Support does not issue Form 1099 or W-2 for support payments because they are not taxable income. The agency maintains payment records for enforcement purposes and reports arrears to credit bureaus and federal tax refund intercept programs when arrears exceed $500 under the Treasury Offset Program.

How do I change the dependency claim after a Vermont divorce?

The custodial parent must sign IRS Form 8332 releasing the claim for specific tax years. The non-custodial parent attaches Form 8332 to their Form 1040. Vermont divorce decrees can require the custodial parent to sign Form 8332 annually, but the IRS requires the actual signed form — a court order alone is insufficient to transfer the Child Tax Credit.