It may seem hard to believe, but we are now less than a month away from the deadline to file federal tax returns. If you have gone through a divorce or other family law dispute in the last year, you may have some questions about how your taxes will be affected.
One question that many divorced parents have is: Which spouse is allowed to claim the dependency exemption for minor children? This can be especially tricky when both spouses share custody nearly equally. As is often the case with these kinds of complex tax-related questions, the most accurate answer tends to be: It depends.
After divorce, only one parent can claim an exemption for a given child per year. If no other agreement has been worked out, the parent who had custody of the child/children the majority of nights over the past year is considered the custodial parent and is entitled to claim the exemption(s). If you and your ex-spouse shared nearly equal custody but he or she had the children 10 more nights than you last year, your ex-spouse would get to claim the exemptions.
That being said, this can be a negotiable issue as far as the IRS is concerned. In some cases, the divorce agreement or parenting plan stipulates that the noncustodial parent may claim the exemption. In other cases, the two former spouses take the exemption on alternate years. You might have 2013 and 2015, for example, and your ex might take 2014 and 2016.
Finally, if you have more than one child, you and your ex-spouse may be able to split up the exemptions. This generally works best with an even number of children.
You will likely get comfortable with post-divorce tax returns within a couple of years. But until that time, please reach out for help if you feel you need it. In order to get the most applicable advice for your particular situation, please consult your family law attorney and/or a tax professional.
Source: The Huffington Post, “Children of Divorce: Who Gets the Tax Exemption?” Stann Givens, Mar. 13, 2014