It won’t be long before 2022 is here – and that means tax season is about to start. Claiming your children as your dependents to reduce your tax burden is a no-brainer when you’re married. If you’re divorced, however, the issue gets significantly more complicated.
Here are some of the most important things you need to know about the issue of kids, custody and taxes when you’re divorced.
Only one parent can claim each child
Generally, the parent who has primary physical custody of a child gets to claim that child as a dependent (even when the parent without physical custody pays support). However, uneven custody arrangements are becoming less common than they once were – and that often leaves parents wondering if they can “split” the tax credit for a child.
Unfortunately, you cannot divide the tax credit the way that you divide physical custody. Only one of you gets the ability to claim a child as your dependent in any given year.
Even with that restriction, however, you do have some options. For example:
- If you and your co-parent agree, you can each take the tax credit for your child or children in alternating years.
- If you have two children of similar ages, you can each claim one child as your dependent for tax purposes.
- If one parent does have primary physical custody, the noncustodial parent may claim the child on their taxes if the custodial gives their written consent (via the appropriate form from the Internal Revenue Service).
That last option sometimes comes into play when the noncustodial parent pays a significant amount of child support and the custodial parent doesn’t have much income of their own.
Whatever you and your co-parent decide to do, it should be documented in your divorce decree or parenting plan to avoid the potential for future problems.
