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Who Gets to Claim Our Children on the Taxes?

Posted by Matt Rooney | Sep 22, 2014 | 0 Comments

The Custodial Parents Gets Default Preference But Their Are Exceptions to the Rule

One of the top questions fielded by a family law attorney on an almost daily basis:

“Who gets to claim our kids at tax time?”

Without fail! And it's for good reason. Dependency deductions are worth significant money to most Middle Class families. Deciding which parent gets to claim the child(ren) is a frequent bone of contention of divorce litigation and post-judgment or FD (non-marital) motions.

The federal tax code is notoriously complicated and difficult to navigate (even for professionals). For family law purposes, here is the general* rule for when the rubber hits the road: Internal Revenue Code section 152 (e) provides that the custodial parent gets to claim the child(ren) unless he or she executes a release permitting the non-custodial parent to claim them instead.

Note the asterisk. There's always an exception!

The first exception, again, presents itself when the custodial parent consents to it. This occurs most commonly when, during divorce settlement negotiations, the parties agree to share the deduction by (1) alternating it on and odd-even year schedule or, alternatively in situations where there is more than one child, (2) each parent claiming one or more child every year.  It's extremely important to properly express this arrangement in your divorce agreement or consent order to limit the potential of future conflicts.

Whenever the custodial parent is willing to waive this right, he or she must execute a release, Form 8332, obtainable at the official IRS website; the release is subsequently appended to the non-custodial parent's tax return for each and every year that he or she gets to exercise the exemption deduction. 

In limited circumstances, the Court can use its discretion to decide whether to grant the non-custodial party the ability to claim the minor child on his or her income taxes on equitable grounds. For example, when the custodial parent is not currently employed, he or she is not paying any income taxes and, consequently, derives little or no benefit from exercising the deduction. The only party capable of pecuniary gain from claiming the child or children on their taxes under those circumstances would be an employed non-custodial parent who is paying child support. The non-custodial parent would argue that it is in the children's best interest for he or she to retain much income as possible for the minor child(ren)'s benefit. Questions regarding taxes and family law in the support context are, so to speak, just the tip of the iceberg. If you have specific questions regarding child support, alimony, the tax implications of either or divorce generally, please contact the child support attorneys at DeMichele & DeMichele or call (856) 546-1350. While attorneys do not guarantee results, we're here to help you navigate these difficult issues and put you in the best possible position on the other end of your legal dispute.  

About the Author

Matt Rooney

Practice Areas: Family Law (including Divorce, Alimony, Child Support, and Domestic Violence); Municipal Court; Personal Injury; Residential Real Estate; Civil Litigation; Collections.


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