For many couples going through a divorce, one of the most contentious aspects of this process is determining how to split custody. If the parents cannot come to an agreement, the court may intervene to issue a decision on the matter. However, you may soon learn that this decision can have tax implications, especially when custody is divided evenly. As such, the following blog explores what you should know about which parent is able to claim the child on their taxes when custody is divided enly between the couple. You’ll also learn the importance of working with a Nassau County family law attorney to assist you through these complex legal matters to fight for the best possible outcome.
What Parent Is Able to Claim a Child When Filing Taxes?
In general, when custody is split between two parents, the Internal Revenue Service will rule that the primary custodial parent has the right to claim the child. This is the parent who spends the most overnights with the child, which is typically at least 183 nights.
However, if you and your ex have true, entirely equal custody, the IRS will determine who can claim the child based on who has the higher gross adjusted income.
It’s imperative to understand that in the event that both parents claim the child when filing taxes, the IRS will flag and deny the returns before conducting an audit to determine who the custodial parent is or which parent has the higher income. Unfortunately, however, this can result in higher scrutiny on both parents’ returns as well as the potential of penalties if the issue recurs.
Can Parents Alternate Who Claims the Child?
In instances where both parents share equal custody, a couple may agree to alternate who is eligible to claim the child on their taxes, or, in the case of multiple children, the parents can split who claims what child annually.
If you decide to alternate who is eligible to claim the child each year, it’s critical to ensure this is written as part of your custody agreement. You can designate which parent will claim the child on even years and which will claim them on odd years. You should also note, however, that in order for the non-custodial parent to claim the child, the custodial parent must complete IRS form 8332, Release/Revocation of Claim to Exemption for Child by Custodial Parent. The non-custodial parent will then submit this document while filing their taxes for the year.
In some instances, parents will agree to let the parent who pays child support claim the child on their taxes, so long as they have met their child support obligations. If the non-custodial parent has missed payments, the custody arrangement may revoke their right to claim the child.
Navigating custody matters can be incredibly difficult, especially when you consider the tax implications of these issues. As such, the team at Barrows Levy PLLC will do everything possible to help you navigate these complicated legal matters. Our firm understands how overwhelming these issues can be, which is why we will help you fight for the best possible outcome. Contact us today to learn more.
