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Daniel Solutions
Daniel Solutions, Divorce Lawyer
Category: Family Law
Satisfied Customers: 9934
Experience:  Practicing Attorney for over 15 years
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Im getting a divorce and my husband is claiming that the AAP

Customer Question

I'm getting a divorce and my husband is claiming that the AAP (Adoption Assistance ) I receive each month is considered my income. I've heard that it is considered the child's income that is paid to me on their behalf. I do not have to pay taxes on it. Is it to be considered my income in the matter of cort order child support? Janette, CA
Submitted: 8 years ago.
Category: Family Law
Expert:  Daniel Solutions replied 8 years ago.
The North American Council on Adoptable Children (NACAC) strongly warns that Title IV-E Adoption Assistance payments were never intended to become "bargaining chips" between divorcing parents. Title IV-E subsidies are the entitlement of the child, not the parents.
In a similar child support case, the children were in the custody of parent A. Parent B wanted to deduct half of the amount of the children's subsidy payments from the child support payment. NACAC warns that this request was contrary to the federal intent of P.L. 96-272-The Adoption Assistance and Child Welfare Act of 1980. Subsidy payments are to follow the child and be used to benefit the child, not be counted as income for a parent.
The IRS makes strong statements about the use of benefits such as adoption subsidies. According to the IRS:
[parents and others are] not to include in income the benefit payments from a public welfare fund. Adoption assistance payments were ruled to be public welfare in 1974. Therefore, Title IV-E payments are income exempt for purposes of taxation. (Chapter 13: Other Income-Income Not Taxed in IRS Publication 17: Your Federal Income Tax (1990).)
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Customer: replied 8 years ago.
I found this answer on the NACAC website already, practially word for word including the Parent A vs Parent B senerio. I was hoping I could get some case law to use in court . If you find some I would appreciate it. Janette Melendez