Can Both Parents Claim Their Child on Taxes After Divorce?
Divorce changes everything. Unfortunately, that usually means the cost of living is going to go up. Divorced parents face the prospect of supporting two separate households with the same salaries that were used to fund one. On top of the obvious expenses such as mortgages, rent, utilities, etc., you should also be thinking of non-everyday costs: such as taxes.
The federal government and the state of California both collect taxes from California citizens. However, both of these arms of the government understand that raising children is expensive, and tax credits are offered to parents that are meant to help offset some of the high costs of rearing a family. Logically, if parents are married and file their tax documents jointly, both parents will jointly share the benefit of the minor child tax credits.
But what happens when parents are separated or divorced, or even just filing their taxes separately? Both parents are still obligated to contribute to the health and maintenance of each of their children. Accordingly, is each parent still entitled to receiving the tax credit awarded for that minor child? Can each parent claim their children on their taxes?
There are many aspects of a divorce agreement that are one and done – such as who gets the house or what property goes to who. Taxes, on the other hand, are often an ongoing issue parents have to deal with yearly. So, it is wise to take the necessary steps to understand and think through how you and your estranged spouse want to address tax issues ahead of time in the parenting plan.
Status as a Dependent
While the federal government no longer offers a tax exemption for minor children and other dependents, they do frequently issue tax credits. A tax credit can be claimed for an individual who is listed as a dependent on your tax return. These credits can be substantial, so it is worth your time to ensure the correct number of dependents is listed on your annual tax return documents.
Children Can Only Be Claimed Once
While both parents bear the cost of raising a child, a single year’s dependent tax credit cannot be sent to both parents if they have filed separate tax returns. A dependent child can only be listed on one individual set of tax forms per year.
However, just because the government itself cannot send two separate filers the value of the tax credit, that does not mean parents cannot find a way to share or split the credit. Many parents utilize various strategies that enable them to share the tax benefit.
Parents might work into their divorce agreement, for instance, that the parents will alternate years on who claims the children as dependents. Or if there are multiple children, one parent will always claim one, and the other the second. There are many solutions and possibilities, and experienced divorce attorneys can review your diverse options with you and help you strategize your best way forward.
Contact the Law Office of Bradley S. Sandler to Ensure Fair Distribution of Tax Credits
One of the things an experienced divorce attorney can do for you is successfully guide you through issues before they ever become a problem or regret. Developing a fair system for tax credit allocations is smart and achievable – an experienced divorce attorney at the Law Office of Bradley S. Sandler can help. Contact us to begin working with our team and discuss your family’s situation today.
Sources
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules