Who Claims the Children on Your Taxes After Divorce?

Who Claims the Children on Your Taxes After Divorce?

When you and your spouse are divorcing, you have the obvious checklist of topics to address, such as child custody, child support, and division of property. An often overlooked issue is who will claim the child tax credit on federal taxes. Although you may be tempted to put off this decision until tax filing time, it is best to include it as part of your divorce agreement, particularly since the child tax credit was doubled as of January 1, 2018.

Recent changes to tax law

The sweeping tax bill signed into law in December of 2017 made significant changes to individual and business taxes, including eliminating the dependent exemption and increasing the child tax credit to $2,000 per qualifying child beginning in tax year 2018. Prior to the TCJA, only the taxpayer who was eligible to claim the child’s dependent exemption could claim the child tax credit. The TCJA eliminated the dependent exemption, but the definition of dependent remains as it relates to claiming the child tax credit and other related tax benefits.

Children of divorced parents

For the most part, a child is considered the qualifying child of the custodial parent. Generally, the custodial parent is considered the parent that the child lived with for the longer period of time during the year. But, in some situations, the child may be treated as the qualifying child of the noncustodial parent if special rules apply. This special rule for the children of divorced or separated parents – or parents that live apart — requires that both of the following conditions are met:

  • Custodial parent must sign a form releasing the claim to dependency for the child
  • Noncustodial parent must attach this form to their federal income tax return

If the custodial parent completes and signs statements without imposing any conditions, then the noncustodial parent is permitted to claim the child both as a dependent and as a qualifying child for the child tax credit. In doing so, however, the noncustodial parent is not permitted to claim “head of household” filing status on their tax return, nor may they claim the earned income credit. Furthermore, noncustodial parents may not claim credit for child and dependent care expenses, the health coverage tax credit, or the exclusion for dependent care benefits.

Questions about the child tax credit? Give us a call

Divorce has many moving parts, and it can be overwhelming for many couples. At Bandle & Zaeske, LLP, our experienced Milwaukee divorce lawyers work with you every step of the way, answering your questions, keeping you abreast of developments, and representing your best interests for the best possible outcome. Schedule a complimentary consultation with a member of our team to discuss your situation; contact our office at 414-359-1424 or contact us online.

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