FAQ: Can You Claim Your Children as Dependents If You Don’t Have Custody? (UPDATED: Jan. 2019)

Can you claim your children as dependents on this year's tax return (even if you don't have custody?)

(UPDATED: January 15, 2019) Tax season is here, and no one wants to be on Uncle Sam’s radar. If you make a mistake when filing and claim your children as dependents when you don’t have the right to, you could very well receive a letter in the mail or, worse, a knock at the door.

If you are newly divorced and this will be your first year filing with your new status, there are some things you need to know about custody, child support, and who is eligible to claim your children as dependents on this year’s tax return. Additionally, with the new tax laws in full effect as of January 1, 2019, it is important to be aware of the changes to how alimony is taxed as well.

So, who gets to claim your children as dependents on this year’s tax return?

In general, the parent who physically has the children for the greater part of the year is the person permitted to claim your children as dependents come tax time. This can be an easy determination to make for divorced parents in situations where one parent has the kids through the week, while the other has them on the weekends. It can be difficult to figure out for parents who have joint custody that is truly 50/50.

In cases where joint custody is a true half-and-half situation, the IRS has established a set of rules called the “tiebreaker rules.” These rules will help parents, or their tax professionals, determine who can legally claim the children as dependents.

In the event that only one of the parents is the biological or legal parent of the children, this is the parent who can claim the children as dependents for tax purposes.
When both parents are biological or legal parents, the person with the highest adjusted gross income can claim the children as dependents at tax time. This is assuming that the children live with each parent equally.
In situations where neither guardian is the biological or legal parent of the child, the caregiver with the higher adjusted gross income can claim the children as dependents for tax purposes.

What to Do When Your Ex Disagrees About Who Should Claim Your Children as Dependents

Let’s say that you’ve read all the information you can, you have spoken to a tax professional and even called up the IRS, but your ex is still arguing that you do not have the right to claim your children as dependents. What do you do?

In truth, your ex’s refusal to listen to reality is not your issue to deal with. File your taxes as you know to be correct and then let your ex do as they please. When the IRS gets the forms that have both parents claiming the children as dependents, they will likely audit the person they believe to be ineligible to claim them. That means that your ex will have to answer some tough questions, not you.

Does it mean that it won’t be you who is audited? No. You may receive a request for more information. However, if you have already determined that you can legally claim your children as dependents on your taxes, you should find it quite simple to provide the information asked for.

If you are doing nothing wrong, you should have nothing more to worry about besides the hassle of answering questions, either through the mail or in person.

In some instances, the parent who is permitted to claim your children as dependents chooses not to for whatever reason. If you decide that you don’t want to claim the children but are going to let your ex-spouse do so, you will need to complete form 8332, which is the Release/Revocation of Release of Claim of Exemption for Child by Custodial Parent.

Another Tax Issue: Alimony

Under the new tax laws that went into effect on January 1, 2019, alimony payments are longer tax deductible for the payer, and the payee is no longer required to pay income tax on the funds they receive. It is important to note that if your divorce was finalized before the end of 2018, the old rules still apply.

Lastly, Child Support Payments

No matter what you have been told, child support payments are never deductible. It is not considered income to your spouse. If part of your child support payments go toward alimony, you may be able to deduct that portion. Again, speak with a tax professional to be sure you understand what you can and can’t do.

When you have questions about your taxes, it is always in your best interest to consult a tax professional. They are highly trained and understand the intricacies of federal and state filings. It’s typically only a good idea to do your own taxes if you are completely sure you understand what you are doing or have a simple tax situation.

We are here to help.

If you have questions regarding family law matters in Columbia, MD, Coover Law Firm, LLC is here to help. Please reach out to Fred L. Coover, Esquire at (410) 995-1100 today. We will be happy to help you schedule a case evaluation and discuss your legal options with you. Alternatively, you can reach out to us online to schedule your consultation.