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Is interest on Child Support Arrearage taxable as

Customer Question

Is interest on Child Support Arrearage taxable as additional income for the custodial parent? State assesses 6% interest on Child Support Arrearage owed to custodial parent. I know Child Support is not taxable but shouldn't the interest that is paid have to be claimed?
Submitted: 9 years ago.
Category: Tax
Expert:  The Guy Behind the Tree replied 9 years ago.
Current practice is that interest paid on arrearage for child support is to be considered "child support" and not actually interest. A semantic distinction, to be sure, but it is codified here:

"...Receipt and retention of interest paid
    7.—(1) Payments of interest with respect to arrears shall be made in accordance with regulations under section 29 of the Act as though they were payments of child support maintenance payable in accordance with a maintenance assessment, and shall be made within 14 days of being demanded by the Secretary of State..."

And, in any event, for US taxpayers, interest paid on child support arrearages is not an itemized deduction, as it is not a debt secured by a residence.