There are many issues to consider when it comes to child custody in divorce and separation cases. However, one of the most easily forgotten matters is what to do about taxation. Can both parents claim children of whom they share custody as dependents? Ultimately, it depends.
Can the Noncustodial Parent of a Child Claim the Dependency Exemption?
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Not generally . Typically, only one person can claim tax benefits for a child. However, if two parents are divorced or separated and have lived apart for the last six months of the calendar year, the noncustodial parent can claim the tax benefits if and only if the custodial parent decides not to claim the exemption (doing so requires the custodial parent to file Form 8332, making a binding agreement to follow through). With regards to the EITC and dependency care credit, only the custodial parent can make claims for those on taxes.
What If the Parents Have Joint Custody?
Parents who have joint custody of a child may place a provision in their divorce or separation agreement stating that they will alternate claiming the child as a dependent. In absence of doing so, parents can file Form 8332 instead. In this way, the parents can alternate qualifying for EITC. However, dependency care credit and the dependency tax exemption are different matters, and are governed separately by IRS Publication 504 .
What If the Parents Separate Less Than Six Months Prior to Tax Day?
Because the couple is still married and did not live apart for six months prior, neither qualify as the ‘head of household’ filing status and both must file either as ‘married filing jointly’ or ‘married filing separately’. That means that the dependency care credit, EITC, and dependency exemption will be governed by regulations for those two filing statuses.
What If the Parents Separate More Than Six Months Prior But the Divorce Hasn’t Been Finalized?
Here, each member of the couple would be qualified for the ‘head of household’ filing status, so long as they provided more than fifty percent of the cost of maintaining a home. Then, both individuals can claim EITC, but not the dependency exemption or dependency care credits, as those are covered by IRS Publication 504.
This Seems Pretty Complicated. I’m Not Sure I Know What to Do.
If you’re approaching a divorce or separation, issues with taxation and other topics pertaining to child custody are likely important to you. Be sure to carefully evaluate your options. Certainly, navigating this issue and others like it can be thorny and difficult to understand, making a divorce or family attorney a wise choice for getting through the process with a minimum of stress and errors. The best divorce attorneys have years of experience in family law issues and divorce proceedings, like attorney William Mayer. If you’re anticipating a divorce in your future, contact Lauren Taylor for a confidential consultation today at 843-790-9009.
South Carolina divorce attorney Lauren Taylor practices family law in Charleston and Greenville. She graduated from the Charlotte School of Law, and has been practicing for more than ten years.
Since the firm’s inception in 2012, Mrs. Taylor has helped hundreds of people navigate the uncertainties surrounding the family and criminal court process.
She has cultivated a team that ensures each case has a strategy crafted specifically to the clients needs and desires.
Her commitment to top notch service has led her to open two additional offices in the low country where she now resides with her husband Michael and her golden retriever, Buster.