father with small child at a desk doing work on computer

How to Prepare for Your Taxes if You Share Child Custody

If you are separated and have children, filing your taxes for the first time since your split will be a little more complex this time. You are probably used to claiming your children as dependents on your taxes and, now that you are no longer with your partner, custody will play a big part in determining who is allowed to do so. You should consult with a tax attorney to discuss any questions you have as to how separation will impact your tax outlook.

Who Claims the Children as Dependents?

Filing your taxes is already complicated enough, so figuring out who can claim the children will add another layer of complexities.

Here is what you need to prepare your taxes:

  • It is essential to know who the custodial parent is when it comes to preparing your taxes. The parent with whom the children spend more time typically has the right to claim the children as dependents. However, if both you and your ex have an equal amount of time with the kids, the IRS will likely default to whoever has the highest adjusted gross income. It is also possible to alternate years, if an agreement can be reached.
  • Make sure you and your ex-spouse do not both claim the children as dependents. In some cases, divorce decrees and custody orders will state which parent can claim the children, which can lessen the confusion. The last thing you want is for both of you to get audited.
  • Parents are eligible for numerous deductions and credits, so determine which you can benefit from. The Child and Dependent Care Tax Credit and Child Tax Credit may be available for parents claiming a dependent. If you are a low or moderate income-earner, you may be eligible for the Earned Income Tax Credit.
  • A court can be asked to make a determination as to which parent may claim the children, and the court will focus on the tax benefit one parent will receive vs. the other parent. So, if you are asking for the court to award you the right to claim the children as dependents, you may need to show the court why your financial benefit by claiming the children is greater than the financial benefit to the other parent.

A non-custodial parent generally can only claim children as dependents if the custodial parent waived their rights in a written and signed declaration (IRS Form 8332). If you are a non-custodial parent and claiming your children as dependents, you will need to attach the signed form when you file your tax return.

Schedule a Consultation with Our Knowledgeable Family Law Attorney

If you are dealing with a family law matter and need legal advice, you can turn to the legal team at Matthew Penick Law. Our attorney has more than a decade of experience and is committed to providing exceptional support and representation.

Reach out to our law office today at (410) 618-0863 to schedule a free initial consultation with our family law attorney to get started on your case.