Separation and divorce - child dependent tax exemption rules

By Michael Lodge on January 31, 2024

Michael Lodge - The Business Advisor - 424.542.7299 - In cases of divorce or separation, determining who gets to claim the child or children as dependents on their tax return can be a complex matter. Typically, the parent with custody of a child is entitled to claim that child on their tax return in order to file as head of household or to claim various tax credits. However, when parents share custody equally and are not filing a joint return, they must come to an agreement on which parent will claim the child. If an agreement cannot be reached, tie-breaker rules outlined in Publication 501, Dependents, Standard Deduction, and Filing Information, come into play.

Note: Make sure that if you do come to an agreement on who or when the children are your dependents, make sure you adjust your parenting and divorce agreement in mediation.

These tie-breaker rules are designed to resolve situations where a child meets the criteria to be a qualifying child of more than one person. The rules dictate that the child is treated as a qualifying child for tax purposes based on specific criteria, including factors such as the child's primary residence, the parents' adjusted gross incomes, and other circumstances. Ultimately, these rules aim to provide a clear framework for determining which parent has the right to claim the child as a dependent on their tax return, providing guidance in situations where parental custody and financial circumstances are evenly balanced.

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