No, the state does not get a percentage of child support in the ordinary sense. Every dollar of a support order is meant to reach the custodial parent for the child. The exceptions are narrow: if the family receives TANF cash assistance, the state can keep collections to reimburse itself for that aid; a flat $35 annual service fee applies to non-TANF cases once collections pass a threshold; and about two-thirds of states charge interest on unpaid arrears.
How Child Support Actually Moves
Child support is money the noncustodial parent pays to help cover a child’s housing, food, healthcare, and daily costs.1Office of Child Support Services. How It Works In most cases the payment doesn’t move parent-to-parent. It moves parent-to-employer-to-state-to-parent. Federal law requires automatic income withholding whenever a support order is issued or modified, even when the paying parent is current.2Office of the Law Revision Counsel. 42 USC 666 – Requirement of Statutorily Prescribed Procedures to Improve Effectiveness of Child Support Enforcement The employer sends the withheld amount to the state disbursement unit, which forwards it to the family.
The state is a conduit, not a beneficiary. Nothing is skimmed off the top of an ordinary payment.
When the State Does Keep Child Support: TANF
The one situation where the state genuinely takes child support money is when the family receives Temporary Assistance for Needy Families. As a condition of receiving TANF, the custodial parent must assign their right to collect child support to the state.3National Conference of State Legislatures. Child Support Pass-Through and Disregard Policies for Public Assistance Recipients It is not optional.
Once the assignment is in place, current child support the paying parent sends in goes to the state rather than the family. The state uses those collections to repay itself and the federal government for the TANF benefits paid out.4Administration for Children and Families. Assignment and Distribution of Child Support Under Sections 408(a)(3) and 457 of the Social Security Act Federal law caps what the state can keep at the amount of unreimbursed assistance, so it cannot pocket more than it paid out. In practice, when monthly support is modest and TANF benefits are larger, the state absorbs the whole payment and the family sees nothing of that support while on assistance.5Office of the Law Revision Counsel. 42 USC 657 – Distribution of Collected Support
Pass-Through Rules Vary by State
About half the states pass some collected support through to the family even while it’s on TANF.3National Conference of State Legislatures. Child Support Pass-Through and Disregard Policies for Public Assistance Recipients Amounts differ widely. Some pass through $50 a month, others $100 for one child or $200 for two or more, and a few pass through the entire payment. States that also “disregard” the passed-through amount don’t count it as income for TANF eligibility, so the family isn’t docked benefits for receiving it. Whether your state has a pass-through, and how generous it is, decides whether a paying parent’s dollars reach the child during a TANF period.
After the Family Leaves TANF
Current support goes directly to the family once TANF ends.6Administration for Children and Families. Child Support Handbook – Chapter 6: Where the Money Goes Arrears are more complicated. If back support built up during the TANF period, the state still has a claim on those “formerly assigned arrears,” but federal law puts the family first: arrears owed to the family are paid before the state collects on arrears assigned during TANF.5Office of the Law Revision Counsel. 42 USC 657 – Distribution of Collected Support A family that spent two years on TANF may leave the program and still see the state take a share of arrears collections for a long time afterward, capped at what the state actually paid in assistance.
Fees the State Charges on Non-TANF Cases
Outside TANF, the state doesn’t take a percentage, but federal law authorizes two flat fees for running enforcement services.7Office of the Law Revision Counsel. 42 USC 654 – State Plan for Child and Spousal Support
- An application fee of up to $25, charged one time when a non-TANF family applies for enforcement services. The state can bill the applicant, recover it from the paying parent, or absorb it. Families on TANF, Medicaid, or foster care are exempt.
- An annual service fee of $35, imposed on non-TANF cases once the state has collected at least $550 in support in a federal fiscal year. The state can deduct it from support collected (but not from that first $550), charge the applicant, recover it from the paying parent, or absorb it.
The $35 annual fee is the closest thing to a state “cut” on ordinary child support, and it’s a flat fee, not a percentage. On $6,000 collected in a year it comes to about 0.6%. Some states pay it themselves rather than pull it from the family’s support.
Interest on Unpaid Arrears
About 34 states charge interest on overdue child support, and this is where the amount owed can grow well beyond the original order.8National Conference of State Legislatures. Interest on Child Support Arrears Rates run from about 4% a year at the low end to 12% at the high end, with several states in the 9% range and others tied to market benchmarks. Interest accrues on the unpaid balance, not on future payments, so a parent who owes $10,000 in arrears in a 10% state could see the balance climb by $1,000 in a year if payments don’t outpace the interest.
The remaining states charge no interest on arrears at all. Whether it applies to your case depends entirely on the state where the order was issued.
Tax Refunds, Offsets, and What the IRS Takes
Child support is invisible to the tax system. It is not deductible for the paying parent and not taxable income for the receiving parent.9Internal Revenue Service. Dependents 6 The IRS takes no percentage. Receiving child support won’t raise the custodial parent’s tax bracket or reduce their refund.
The wrinkle is the Federal Tax Refund Offset Program. When a paying parent falls behind, the state submits the past-due amount to the Treasury, which intercepts part or all of that parent’s tax refund and sends it to the state agency for disbursement.10Administration for Children and Families. How Does a Federal Tax Refund Offset Work? Non-joint refunds must go out within 30 days; joint refunds can be held up to six months while the other spouse’s share is separated out. If the family formerly received TANF and assigned arrears remain unpaid, the state keeps the portion covering government-owed arrears and passes the rest to the family. It can look like the state took the refund, but the distribution follows the same priority rule: family-owed arrears first, then state-owed.
The Short Version
For families never on public assistance, the state takes no percentage of child support. The only deductions are a possible one-time application fee up to $25 and a $35 annual service fee once collections cross $550, and in some states interest that builds on unpaid arrears. For families on TANF, the state can keep collected support up to the amount of aid it provided, softened by a pass-through in about half the states. And no matter which situation applies, child support is not taxed.