Child custody and support can have effects on a wide range of other legal issues. Obviously, your finances will be heavily affected if you pay child support or care for a child in your household, but what about your taxes? Parents can typically get tax exemptions for having dependent children by claiming them on their taxes. If you are divorced, separated, or are unmarried with children, do you get to claim shared children on your taxes? The Ventura child custody attorneys at the Law Offices of Bamieh and De Smeth explain who gets to claim a child on their taxes in joint custody cases.
Who Gets to Claim a Child as a Dependent if You Share Custody?
On your taxes, you get to claim anyone who relies on you financially as a “dependent.” You typically claim one exemption for yourself, plus an additional exemption for your spouse (if you file jointly), and one for each dependent child in your household. If you pay child support for children outside your household, the court may allow you to claim this deduction instead of the parent that the children live with.
Typically, only a parent with a child living in their household can claim an exemption for their dependent child. When one parent has physical custody, and the other does not, the parent with the child in their home should claim the exemption. However, since taxes reflect your finances, not your living situation, it may be more appropriate for the parent who pays the most to claim the deduction.
In many child custody cases, one parent has the children for most of the year, and the other parent pays child support to help relieve the financial burden of raising the kids. Since the person paying is the one most in need of the financial help of the tax exemption, courts may arrange things so that the support payor can take the deduction instead.
Who Gets the Tax Exemption in 50/50 Custody Cases?
In California, joint custody cases in which parents share parenting time evenly may not be clear about who should benefit from the tax exemption. The court handling the child custody case can usually include the tax exemption as part of the order, providing a clear rule for who may use it. The courts may also allow parents to negotiate over who should take the exemption.
Typically, if both parents really share parenting time and the financial burden of child support evenly, the exemption will go to the parent with the higher income by default.
IRS Form 8332 allows a parent to “release” the exemption so the other parent can claim it instead. Since parents can do this voluntarily, they can agree to release the exemption to the other parent as a consolation for getting additional parenting time or support payments. Parents could also agree to a fairer arrangement, such as taking turns using the exemption, if the court finds such an arrangement appropriate and is willing to include it in the custody order.
Taxes can be complicated, and these general rules do not always apply to your specific situation. Talk to a California tax lawyer for help with your case to ensure you file your taxes properly.
Can Both Parents Claim Exemptions for a Child after Divorce?
If you and your spouse are divorced – or if you share children with another person who files their taxes separately – can you both claim the exemption for your shared children? It may seem far easier if both parents claim the deduction for shared children rather than deciding which parent benefits.
Unfortunately, the IRS does not allow more than one person to claim a single person as a dependent. This means that if both parents try to claim the child as a dependent in the same tax year, the IRS may investigate the error, and one or both of you could be in trouble. The IRS could make its own decision about who was “correct” in taking the deduction, and the other parent could have to pay additional taxes and penalties. Because of this, it is important to use Form 8332 to release the exemption and ensure that both parents have the legal paper trail to prove their taxes were filed correctly.
Family Lawyers for Joint Custody Cases
If you are going through a custody battle or divorce and want to know how your child custody decisions might affect your taxes, consult with an attorney on your case. The Ventura family law attorneys at the Law Offices of Bamieh and De Smeth can help you negotiate and argue your child custody case, taking into account the tax consequences of your child custody decisions. To schedule a free legal consultation on your child custody case, contact our attorneys today at (805) 643-5555.
