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CLAIMING A CHILD FOR TAX PURPOSES: WHO HOLDS THE RIGHT FOLLOWING SEPARATION OR DIVORCE?

Posted by Michael E. Lyons | Dec 06, 2022 | 0 Comments

As family law litigators we are often asked the question “who holds the right to claim a child for tax purposes following separation or divorce?”  Most people are surprised to learn that even though they share near equal parenting time and pay substantial monthly child support for their children following separation or divorce, the IRS only allows one parent to claim a child for tax purposes.  

Specifically, under IRS regulations, only the “custodial parent” may claim a child as a dependent for tax purposes. The IRS defines the “custodial parent” as the parent with whom the child resides for the greater part of the year. In the event a child resides with each party for an equal number of overnights, then the “custodial parent” is the parent with the highest adjusted gross income.  Of course, like most things involving the IRS, the rules concerning this issue are complex and, frequently, changing.  For detailed information from the IRS, click here: https://www.irs.gov/newsroom/claiming-a-child-as-a-dependent-when-parents-are-divorced-separated-or-live-apart   

Unfortunately, this issue often gets overlooked by parents who establish custody orders and/or proceed through divorce cases without experienced counsel.  Indeed, at Patriots Law Group, we frequently encounter clients who entered into child custody agreements providing equal parenting time (to wit: week on/week off custody or “5-2-2-5" custody), without realizing that just a few days separated him/her from “losing” the right to claim a child for tax purposes.  Adding insult to injury, frequently these clients learn of the issue after a protracted delay of their tax refund or receipt of a notice of tax penalties/interest due to incorrect tax filings. 

An experienced family law litigator, however, can assist you with navigating this issue and achieve a fair distribution of child tax benefits.  For instance, under IRS rules, a non-custodian parent (the parent with less residential time with a child) can claim a child if the custodian parent executes a release of his/her right to claim the exemption.  As of the writing of this blog, an IRS Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodian Parent” must be executed by the custodial parent to release the exemption, https://www.irs.gov/pub/irs-pdf/f8332.pdf.    

At Patriots Law Group, our experienced family law litigators raise this issue upfront in custody and divorce negotiations and demand a fair division of the right.  By combining this issue in the negotiations over broad custody terms, our attorneys frequently secure agreements granting the non-custodian parent an equal right to claim the parties' child(ren).  Some examples of how we accomplish this include: 

  • Alternating the right each year (“Wife may claim Janie in odd years and Husband can claim Janie in even years.”); or 
  • Splitting the right to claim specific children (“Wife may claim Janie each year and Husband may claim Johnnie each year.”). 

No matter how the issue is resolved, it is critical that the custodial parent be required to execute and deliver to the non-custodial parent a fully executed IRS Form 8332.  

SEEK LEGAL ADVICE TO UNDERSTAND THE OPTIONS AVAILABLE TO YOU 

The attorneys at Patriots Law Group of Lyons & Hughes, P.C. are familiar with child tax benefits and have the skills and expertise negotiating such issues in divorce cases. Give us a call at (301) 952-9000 to schedule a consultation today to discuss how the IRS rules will be applied in your particular case.   

DISCLAIMER:  The information above is for informational purposes only and is not intended to serve as legal advice for any particular situation.  No attorney-client relationship is intended or created by this information and may not be relied upon based on the above-statements.  Each individual situation is different and therefore a consultation is necessary before any advice can be relied upon as appropriate and accurate for your situation. This information is current as of November 4, 2022.  Patriots Law Group of Lyons & Hughes, P.C. is responsible for this advertisement. 

About the Author

Michael E. Lyons

“As a veteran, I bring my core values of service, integrity, and excellence to every client, every case, every time.” Background: Michael E. Lyons (“Mike”) handles cases in Maryland and Washington D.C. fr...

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