Tax Filing Rights for Joint Custody

By Kay Lee

When determining a custody arrangement for your children, taxes may not typically be in the forefront of your mind. Dependent children provide parents with considerable tax savings so it is important to understand the tax implications of custody choices during divorce negotiations. The ability to claim a child as a dependent will affect your ability to claim certain tax credits or qualify for certain tax deductions.

Joint Legal & Physical Custody

Joint legal custody means that both parents share in the right to make decisions on behalf of their children. Parents with joint legal custody often share joint physical custody as well, but not necessarily. Physical custody is the primary factor in determining which parent will be able to claim a child as a dependent for tax purposes; however, it is not the only factor.

Dependent Exemption

The Internal Revenue Code provides exemptions for spouses and dependents. This means that you may claim other individuals on your taxes; thereby, exempting a greater amount of your income from federal taxes. A child may not be claimed as a dependent by more than one person.

Divorce is never easy, but we can help. Learn More

Custodial Parent

In general, the custodial parent will claim the child as a dependent for tax purposes. In the IRS's eyes, the custodial parent is the one with whom the child lived for the most nights during the calendar year. If a child spends an equal number of nights at each parent’s house, the IRS deems the custodial parent the one with the higher adjusted gross income.

Negotiable Tax Rights

Although tax rules have this default tax treatment for children of divorced, separated or unmarried taxpayers, this tax treatment is subject to negotiation. For example, during a divorce, a couple could stipulate who gets to claim the children as a dependent in exchange for something else, such as more cash or other property. That means the parent the IRS would consider to be the custodial parent would release his right to claim a child as a dependent. He would do so through IRS Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. The same form is used to revoke any prior forms that released a claim.

Divorce is never easy, but we can help. Learn More
Can a Man Paying Child Support Be Denied to Claim a Child on Income Taxes?

References

Resources

Related articles

Can Divorcing Parents Split Children for Taxes?

After a divorce, the IRS no longer allows parents to file joint married tax returns. Therefore, only one parent can claim the dependent exemption for each of their children. You can’t scissor an exemption down the middle, with each parent taking half on two separate returns. If you’re both going to enjoy the tax benefit of being parents, you’ll have to get creative.

Can the IRS Charge Interest & Penalties While You're in Bankruptcy?

Bankruptcy rules and regulations – particularly regarding taxes – can be highly dependent on the chapter you file. Both Chapter 7 and Chapter 13 stop collection efforts by the Internal Revenue Service while you're in bankruptcy. Beyond this, however, each chapter treats tax debts differently.

How to Handle Previous Refunds for Taxes in a Divorce

Since divorce is a process, you may be considered legally married for a period of time after you and your spouse have separated, with your joint life together continuing until the divorce is finalized. During this time, you will undergo the process of unwinding your joint life together, especially as it pertains to property and financial matters. You may be owed a refund from any joint taxes filed during the separation period, but before the divorce is finalized.

Get Divorced Online

Related articles

Can I Revoke a Release of Claim to an Exemption if There Is a Divorce Decree?

Because claiming your child as a dependent on your tax return can save you money, it is often an area of dispute among ...

How to File a Motion for Claiming Dependants After Divorce

If your divorce agreement does not say anything about who gets to claim the children as dependents, then typically the ...

How to File Taxes and Claim Children Due to Past-Due Child Support

Claiming your children as dependents is never automatic; there are a number of requirements you must satisfy before you ...

Divorce & Emancipation

Divorce brings a marriage to a legal end and divides property between two individuals. Another issue decided in a ...

Browse by category
Ready to Begin? GET STARTED