Although the tax exemptions for dependents have been discontinued, the tax code still offers numerous tax benefits for those who can claim a child as a dependent on their tax return. So, when parents divorce, who gets to claim their child? Can they share the child for tax purposes just like they do for parenting time?
If you have not incorporated tax provisions into your settlement agreement, it is a good idea to have your divorce lawyer negotiate an arrangement so that each parent understands their obligations and opportunities The IRS has specific rules on the subject, and you need to be aware of how these rules affect your ability to take certain tax credits and claim other benefits.
Can Both Parents Claim a Child as a Dependent?
Unless parents are filing a joint return, only one of them can claim a child as a dependent for a particular tax year. Some parents choose to take turns claiming a child in alternate years. Parents who have more than one child can split them so that each one can claim one or more dependents. But the child tax credit, credit for dependent care expenses, and other tax benefits for an individual child cannot be divided between parents the way that other aspects of parenting may be.
How the IRS Decides Which Parent Can Claim a Child
Generally, a parent can claim a child as a dependent for tax purposes only if that child meets the standards as a “qualifying child.” The child must:
- Have a valid Social Security Number
- Live with you for more than half the year
- Be under the age limit for the particular tax benefit
- Not provide more than half of their own support during the tax year
The parent lived with for more than half the year is considered to be the custodial parent by the IRS, and that parent is presumed to have the right to claim the child as a dependent.
Making an Exception to the Rule
Parents can and often do agree that the noncustodial parent, often the one paying child support, should get to claim the child as a dependent in one or more years. The IRS will recognize this arrangement only if the parents follow particular rules.
The custodial parent must sign Form 8332 officially waiving their right to claim the child as a dependent for that tax year. Then the parent who wishes to claim the child must attach that form to their tax return.
If parents have an agreement that the noncustodial parent will be allowed to claim the child tax credits each year, but the custodial parent claims the child anyway, the other parent cannot also claim the child. The IRS will not allow it. Instead, the parents will need to resolve the issue. A family law attorney might negotiate an agreement in which the first parent files an amended tax return or pays an amount equal to the value of the tax benefit.
Your Family Law Attorney Can Help with Tax Issues After Divorce
Parents who can claim a qualifying child may be eligible for a host of tax benefits, so this is valuable status. Tax issues such as the child tax credit and head of household status should be addressed as part of a divorce settlement.
If your divorce is still in progress or you need help establishing or amending an arrangement regarding tax issues, the experienced divorce and family law attorneys at Koiles Pratt Family Group would be happy to explain how we could protect your interests and resolve the conflict. Contact us at any time to set up a confidential consultation.