How Does the Child Support Tax Credit Work in New York?

This video features Carla Barone, a Family Law attorney based in New York.

New York Attorney Explains What Divorced or Separating Parents Need to Know

Video Transcript:

Carla Barone:

It's always recommended to have a consultation with a professional in the area who has experience in all of these issues.

Rob Rosenthal:

Do you know what child support tax credits are and how they work in New York state? where we're gonna find out right now, because that's what we're going to Ask the Lawyer. Hi again everybody. I'm Rob Rosenthal with AsktheLawyers.com, and my guest is New York City attorney, Carla Barone. Before we get started I want to remind you, if you'd like to ask Carla questions about your specific situation, it's easy to do. Just go to AskTheLawyhers.cm, there's a button in the upper right hand corner that says Ask a Lawyer, click on that and it'll walk you right through the very simple process. Carla, thank you for making some time to help us out today.

Carla Barone:

Well, thank you for having me. It's a pleasure to be here. 

Rob Rosenthal:

So let's just talk about what... Well. First of all, let's start at the beginning. What are child support tax credits and how do they work in New York State?

Carla Barone:

Well, it's a great question, and a not so easy answer, they are many... And generally, this is an area of divorce law that we say it's a great idea to collaborate with your accounting professional and introduce your maybe divorce lawyer to your accountant to get together on these kinds of things. An issue is certainly who claims the children as a tax credit while you're moving through separation, legal separation or divorce. So the child tax credit is a credit that a tax filer can get with respect to the children. It results in a credit against taxable income, but this year a lot has changed.

Rob Rosenthal:

And... Well, let's talk about the change. What has changed? And what do we need to know about it?

Carla Barone:

Sure, so the American Rescue Plan this year, or following the COVID-19 pandemic has expanded the child tax credit for the year 2021, and what has happened is the government essentially has allowed taxpayers to claim one half of the tax credit in a monthly periodic payment, and that started being paid out by the federal government by the IRS in July of this year, and will continue as a monthly payment through the end of the year, and the balance of that tax credit will be able to be claimed by the tax filer at the time of filing the taxes and again will come as a payment to the taxpayer. The additional change, which is even larger, really than the amount of money that's coming periodically, is that the federal government through the American Rescue Plan, increased the amount of the credit from $2000 to $3600 for children ages 6 to 16 and extended the $3000 credit to 17-year-olds where it didn't ordinarily do that.

So I guess the big question, and maybe this is, you're gonna have to dumb it down for me, but how do the divorcing parents decide who gets to claim the tax credit?

Carla Barone:

Well, that is a product of negotiation between the attorneys or between the two people moving through divorce, there are many strategies involved around this, it could involve at the non-custodial parent who often is the one who's paying child support, perhaps has his or her payment reduced, the child support payment reduced in the year 2021 because of this incentive that the government is giving to families.

Rob Rosenthal:

And I'm assuming it is, but is it different say between divorcing spouses who have children and couples that were never married and have children? How does that work?

Carla Barone:

Well, the child support for couples who are never married, there still is a child support order the same as it would be for couples who married and divorced, so that would not come as a difference as far as the legal system goes. The period at which the parties are whether they're separated or whether... Until there's a time when there's an actual child support order, there could be a period of uncertainty there in between, but again, the lawyers can help sort that out for people who are unmarried and going through this process.

Rob Rosenthal:

Just in general, question, Carla, what's your advice for people to feel like they're not getting along with the spouse, they're going through the process, or things are coming to a head, or maybe they haven't started the divorce process yet, but they know it's coming, it's coming to a head. What's your advice? What do they do? What's a short synopsis of the process they should take?

Carla Barone:

Sure, well, it's always helpful to gain knowledge and be educated in the areas of both child custody, child support and asset division, and so it's always recommended to have a consultation with a professional in the area who has experience in all of these issues so that the client in person who is about to embark in the process can really operate from a standpoint of having knowledge and knowing what lies ahead.

Rob Rosenthal:

I would see that it could be... You could wait too late to contact an attorney, such as yourself for advice, is there every time and it's too early, or is it always if you think you're headed that way, there's not a too early time? 

Carla Barone:

There really is not a too early timing, many people come in at all stages of their life, maybe just thinking about a separation, knowing that, gee, things aren't going so great, maybe I should see what should I be doing if this is the case? And it's also, again, very good information to have, hopefully it never comes to fruition, but at least knowing, and it's really always a good time to seek a professional even if you're amiss and things aren't going so well to see how things are going.

Rob Rosenthal:

Information is power.

Carla Barone:

It is.

Rob Rosenthal:

Absolutely, awesome. Lots of helpful information Carla, thank you for making some time and answer your questions. I appreciate it. 

Carla Barone:

Sure, thank you. 

Rob Rosenthal:

That's gonna do it for this episode of Ask the Lawyer. My guest has been New York City attorney Carla Barone. I'll remind you again, if you wanna ask Carla questions about your specific situation, it's easy to do, go to AskTheLawyers.com, there's a button on the upper right corner that says Ask a Lawyer, click on that, and it'll walk you through the very simple process. Thanks for watching, everybody. I'm Rob Rosenthal with Ask The Lawyers.

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