Tips For Claiming Children On Your Tax Return

Claiming Children On Your Tax Return

If you’re recently divorced, there’s no question your life is currently filled with major changes. Your daily tasks, schedules, and living arrangements are completely different. That list of changes will also include how you handle your 2018 taxes. Divorced parents will have to file taxes differently than they’ve normally done throughout the years of their marriage. If you’re are a new divorcee, you may have many questions on claiming children on your tax return. Who claims children as dependents? What qualifies a parent as the primary caretaker? What if you’re also paying child support? These and other questions are addressed in this article to help you better understand how to file your 2018 tax returns. While this might shed some light on claiming children on your tax returns, it’s always recommended to work with a tax expert if this is your first time filing your tax returns after a divorce.

Claiming Children on Your Tax Return After a Divorce

First and foremost, it’s important to note that there has been a tax law update as of 2018. The Tax Cuts and Jobs Act has eliminated the personal exception that would allow you to reduce your taxable income. While this elimination does impact your taxable income, there are other financial advantages to claiming dependents. Claiming children on your tax return can still offer tax breaks, such as the child or dependent tax credits, and overall — a better filing status. This can clearly put divorced or separating couples into a compromising position when it comes to deciding who gets to claim their children as dependents.

Who is Allowed to Claim Children as Dependents

The IRS offers some guidelines to claiming children on your tax return after you’ve gone through a divorce. Basically, a good rule of thumb is that the custodial parent, the one which the child spends most of their time with, will claim the child as a dependent. However, the noncustodial parent may be permitted to claim the child as a dependent if he or she is providing half of the child’s support. There’s also another way for the noncustodial parent to claim the child as a dependent. This involves the custodial parent submitting a written statement declaring the noncustodial parent permission to claim the child as a dependent. This option is rarely exercised since there are more financial advantages to claiming children on your tax return as dependents.

Other Rules and Regulations on Claiming Children on Your Tax Return

The family courts will always recommend that divorced parents discuss who is claiming children on their tax returns. It’s against the law for both divorced parents to claim children as dependents. If both divorced parents decide they will claim the children on each tax return, the parent who filed first will be the only form that is accepted. This is why it’s so important for both parents to communicate and have a set plan in place when tax season rolls around. Of course, the courts have special rules in place if scenarios like this occur and both parents file at the same time or if they can’t agree on who will be claiming children on their tax returns. The courts offer the following rules:

  • If only one of the child’s parents is their biological parent, this parent is permitted to claim the child as a dependent.
  • One parent spends significantly more time with the child, this parent is permitted to claim the child as a dependent.
  • If the child spends an equal amount of time with each parent, the parent who has the higher income will be permitted to claim the child as a dependent.

IRS Rules for Claiming Dependents

Besides knowing who can claim children as dependents after a divorce, it’s also important to know if your child meets the tax claim requirements:

  • Proven Relationship: the IRS requires that there be some form of a relationship between you and the child. The child must be your daughter, son, or foster child. It’s also possible to claim dependents who are your grandchildren, younger siblings, step-siblings, nieces or nephews.
  • Age Requirements: The child must be 19 years or younger. You can also claim dependents who are full-time students 24 years old or younger.

For More Information on Claiming Children on Your Tax Returns

While this information can shed some light on the process for filing your tax returns after a divorce, some circumstances can prove to be more complex. For instance, if you and your ex-spouse split all responsibilities evenly in cases of shared custody, deciding on who claims the children on tax returns can get ugly. It’s better to have legal experts involved to help determine who will be labeled as the custodial parent. For more information on how to handle your taxes this season, contact an experienced divorce lawyer for assistance.