Tax Season! Child Tax Dependency Exemption and Divorce. Does It Really Matter?
With tax season upon us and the filing deadline fast approaching, have you considered the child tax dependency exemption/s for 2015? Now I am certainly not a tax attorney, or a CPA, but determining who will claim child tax dependency exemptions and in what years is often a part in the divorce process. So here’s a little insight:
- The Arizona Child Support Guidelines provide for an allocation of the child tax dependency exemptions largely determined by the gross income of the parties, parenting time days and spousal maintenance (if applicable) Thus, if you and your former significant other are fairly equal in annual gross income and parenting time without spousal maintenance the child tax dependency exemption should alternate who claims the exemption every year.
- A parent can lose the right to claim the child tax dependency exemption if they are the payor of child support and they are not current for that tax year by the end of 12/31.
- For tax purposes, normally the “custodial parent” is the one with the right to claim the child tax dependency. The “custodial parent” is defined by the tax code as the parent that has the child in his/her care for over 50% of the nights for that tax year.
- The decree or order may provide for the “non-custodial parent” to claim the child tax dependency exemption in that year or for all years. For any decree or order after 2009, in order to meet the requirements of the IRS, the non-custodial parent must complete and get a Form 8332 signed by the custodial parent releasing the exemption for that tax year.
- The Form 8332 will need to be signed and filed with the federal tax returns every year if the non-custodial parent is claiming the child tax dependency exemption.
Depending on your income, the child tax dependency exemption may not serve you at all. We encourage parents to meet with their CPA or a tax attorney to determine if the exemption will even benefit them.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Child Tax Dependency Exemption and Divorce, or other family law issues, please feel free to contact our Family Law Section at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.