Child Custody Tax Issues: Who Claims a Child on Taxes?
How federal tax laws affect child custody arrangements
on December 15, 2016
Updated on January 4, 2023
The federal government allows parents of minor children certain tax benefits each year. For example, in the United States, parents can receive an income tax credit for each of their children under the age of 17. These benefits can help ease the burden come tax season and allow parents some extra money as they raise their families.
But which parent claims the child tax credit when there are issues between the parents involving child custody? No matter what kind of relationship a parent has with their former spouse, their child custody situation will affect their yearly tax return. The Internal Revenue Service (IRS) enforces tax laws that determine which parent can claim their minor children for federal tax purposes.
Filing Taxes as a Divorced Parent
Typically, when parents are divorced, only one gets to claim the child as a dependent on their annual tax return. An exception exists for divorced parents that are still filing jointly, though this is uncommon. So, for divorced parents that file separately, who gets to claim minor children?
For Parents That Have a Joint Custody Agreement
In most joint custody agreements, there is one parent that generally handles the day-to-day care and well-being of the child. In instances where there is a known custodial parent whom the child spends more time with, the parent can claim the child as a dependent. However, the custodial parent can relinquish the tax credit to the non-custodial parent by filing IRS Form 8332 – Release/Revocation of Release of Claim.
Parents in a joint custody arrangement can also share the tax credit if they so choose.
For Parents That Have a 50/50 Custody Agreement
Suppose that both parents divide time and caretaking of their minor children equally. If there is no true custodial parent, the IRS allows the parent with the highest adjusted gross income to claim the child tax credit.
What If the Non-Custodial Parent Claims Their Children?
Unless they have the permission of the custodial parent, the non-custodial parent should not claim the child as a dependent for their tax year. This can invite raised scrutiny and potential audits from the IRS. Still, there are certain circumstances where the IRS might grant the non-custodial parent’s claim:
- As stated above, when the custodial parent files an IRS Form 8332 with their tax return
- When the non-custodial parent serves as the primary caregiver for part of the year
- When the child has lived abroad with other family members for part of the year
If the non-custodial parent insists on claiming the child as a dependent, consider seeking the legal advice of a family law attorney. It might also be good to speak with a tax professional. They know the ins and outs of IRS rules and tax laws and can inform you of proper filing status regardless of your spouse’s intent.
Questions to Ask a Child Custody Attorney
Speaking to a child custody attorney for the first time can often be intimidating, especially because family law tends to dredge up emotions. Before sitting down with an attorney, consider which questions you’d like to ask them and what answers your ideal attorney might provide. Here are a few examples to help get you started:
- Can I claim my child on my annual federal tax return if I divide parenting time 50/50 with my former spouse?
- Am I entitled to child support?
- Should I speak with an income tax professional?
- Can I get a restraining order against my spouse if they endanger my and my children’s well-being?
- How can I file for sole legal custody arrangement of my minor children?
- Do I need an attorney if my former spouse and I seek joint custody?
Searching For the Right Family Law Attorney
When child custody disputes arise, it is best to enlist legal representation. A complicated and emotionally taxing process can be made easier with the benefit of a lawyer by your side. A family law attorney from an accomplished law firm can provide essential legal advice on marital assets, child custody, and restraining orders, all while guiding you through the nuances of family court.
When using a database such as Super Lawyers, it would be best to find a custody and visitation attorney operating in your current jurisdiction.