When Parents Are Divorced, Who Claims Children on Taxes?
Ending a marriage can be a complicated affair, but unfortunately, the issues don’t end once the divorce is finalized. This is especially true when children are involved.
You may be dealing with child custody and support issues. But come tax time, you’ll be dealing with other tricky issues as well. For instance, which parent can claim the children on their tax returns?
The 2020 tax season is now underway. As you gather all your pay stubs and other documents, make sure you understand whether or not you can claim your child on your taxes.
What to Know About Claiming Dependents
There aren’t any changes to tax law for claiming dependents for the 2020 tax season. In 2018, though, the Tax Cuts and Jobs Act was implemented, and this brought about major changes for divorced parents.
First, you need to understand custody. If you have sole custody, then you have it easy. However, divorces that allow for joint custody and lengthy visits can make it complicated to determine which parent has primary custody.
The tax breaks go to the custodial parent, which is defined as the parent who has custody of the children for the majority of the year. They get even more tax breaks, such as earned income credit and dependent care credit, and if they file as head of household because then they qualify for a lower tax rate.
The other parent would be considered the noncustodial parent. While they typically do not qualify for tax breaks for their children, the custodial parent has the right to allow the noncustodial parent to claim the child as a dependent for tax purposes. To make things fair, some parents do this and switch every other year. Another solution is that if there are multiple children, they can be split among the parents. For example, if a family has two children, each parent can claim one child on their tax return.
While the law allows this transfer, there are some requirements that must be met:
- The parents must have been divorced for at least six months of the year.
- The child must be in the custody of at least one parent for at least six months of the year.
- Most of the child’s support must be provided by at least one parent.
If these conditions are met, the custodial parent can complete IRS Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent and give it to the noncustodial parent. A noncustodial parent can claim the child tax credit with the form, but they will not be able to claim other tax breaks, such as head of household filing status, dependent care expenses, earned income credit and health coverage tax credit.
Seek Legal Help
Taxes are confusing for the average American and things get even more complicated when a divorce and children are involved. Make sure you get the right advice so you can do your taxes correctly.
Concerned about your taxes this year? Fort Lauderdale divorce attorney Edward J. Jennings, P.A. can guide you through financial matters post-divorce. To schedule a consultation, fill out the online form or call 954-764-4330.