As we approach the end of the calendar year, taxes are on everyone’s mind. Perhaps people are thinking more about taxes than usual because of the passage of the new tax law by Congress at the end of 2017. To many who have been through a New York divorce or separation, the tax implications of dissolving a marriage are incredibly important and must be part of the overall discussion regarding other issues, such as the division of assets and child custody.
One issue that frequently arises in New York divorce cases is which parent is able to claim a child or children as a dependent for tax purposes. The ability to claim a child as a dependent can have a significant effect on a party’s tax liability.
For the most part, only one person can claim a child as a dependent on their tax return. However, a custodial parent can waive their right to claim certain benefits, such as the child’s personal exemption, the child tax credit, and the tuition and fees deduction. Notably, a custodial parent could still retain the head-of-household filing status, the child and dependent care credit, and the earned income credit. However, according to the IRS, if the parties have multiple children the parties can either agree on how to split up the dependency credits or a court may make that determination.
When it comes to determining which parent can claim a child as a dependent, the general rule is that the custodial parent will claim the child. However, there are a number of situations where that does not necessarily happen. As is often the case, the easiest way for a non-custodial parent to claim a child is by agreement. This can be written into a separation or divorce decree. Thus, if the custodial parent agrees that the non-custodial parent can claim a child, and they execute a written declaration (or the agreement is contained in a separation or divorce decree), the non-custodial parent will be able to claim the child as long as the parents collectively provided more than half of the child’s support for the year.
In situations where there is no written declaration providing that the non-custodial parent can claim a child, and the issue is not mentioned in a separation or divorce decree, the IRS has created “tie-breaker rules,” to determine which parent can claim a child as a dependent. The tie-breaker rules provide that a child can be claimed by the parent with whom the child lived the longest during the year. In the event that a child lived with both parents for an equal amount of time, the parent with the higher adjusted gross income will be permitted to claim the child. Here I am relaying information contained in IRS publications. Please consult with your CPA or tax adviser for actual tax advice. This blog is simply general information about negotiating or arguing for the right to claim the child as a dependent on the tax returns in a divorce or child support case.
Do You Know Who Is Claiming Your Children in 2018?
If you are currently separated, have been through a New York divorce, or have any other New York family law issues, I, Attorney Darren M. Shapiro can help. I am a dedicated Long Island family law attorney with years of experience assisting clients in a wide range of issues, including divorce, separation, and child custody. To learn more about how my office can help you, call 516-333-6555 to schedule a free initial consultation, up to a half hour, today.
See Other Blog Posts:
When Is It Appropriate for a Judge to Order Spousal Maintenance for Longer than Suggested by the Guidelines?, Long Island Family Law and Mediation Blog, August 1, 2018
Is Business Income Factored into a New York Court’s Post-Divorce Maintenance Award?, Long Island Family Law and Mediation Blog, August 10, 2018