Separation and divorce often comes with overwhelming emotions, practical challenges, and complexities affecting numerous aspects of everyday life. In light of how tax season can already be a dreaded time of year, along with the stresses of new family dynamics, do you know all you need to know in order to successfully navigate the nuances of child custody and tax law?
The Basics Of Child Custody And Tax Law
When you are married and filing taxes jointly, federal tax law simplifies most questions about dependents. All income, investments, and life circumstances are considered for both partners together, so both parents simultaneously benefit from claiming dependents. However, when that arrangement changes, it is best to carefully consider where the dependent is residing for most of the year and if you and the other parent have a solid understanding as to who will claim the dependent on their annual tax filings.
Can You Claim Your Dependents On Your Taxes?
According to federal tax law, children may only be declared as dependent by one parent. Under no circumstances may both parents claim the same children as dependents on their taxes. That part of tax law is very clear even when child custody situations are not. However, we do recommend the following best practices for answering the question of “can you claim your dependents on your taxes?”
Go beyond the custodial parent presumption. According to the IRS, the custodial parent, or the parent who has taken care of the child for more than half of the year, may presume to claim the dependent child on their taxes. However, this presumption may be rebutted by either the other parent or the IRS under certain circumstances.
Pay careful attention to the divorce decree. A divorce decree may contain a provision that the non custodial parent will be able to claim the child as a dependent on their taxes. In this case, the decree carries significant weight, so there is a substantial burden of proof before dependency is recognized differently.
Consider IRS Form 8223 for more amicable and official arrangements. IRS form 8223 provides the opportunity for a parent to officially waive their right to claim the child on their taxes, whether that be for one year, several years, or indefinitely. If you share joint custody of your children, it then becomes much easier to determine the custodial parent. Even if your child splits their time between you, you alternate years that each of you claims the dependency. In such cases, the 8332 must be completed on an annual basis and it must be signed and attached to the income tax return.
Although it is not to be taken lightly, this form can prevent a number of headaches when given full consideration in most child custody arrangements.
There are other arrangements when multiple children are involved, too. If you have two or more children, dependent claims may be split between you, which may also give you the ability to utilize the “head of household”(Hide Link) filing status.
Before You Take Action
As always, before you take any action, carefully consider the circumstances and if you can use these exemptions, especially if it may lead to a dispute. If you have more questions about taxes and child custody, whether you are already divorced or find yourself in a developing situation, contact the Law Offices of Sean Patrick Cox for a free consultation.
If you or someone you know is going through a difficult custody matter where they may need the assistance of our child custody attorneys, please call the Law Offices of Sean Patrick Cox P.L.L.C. at (616) 942-6404 for a free consultation.