September 2, 2021 | Share
Can Both Parents Claim the Same Child on Their Taxes?
Even though tax laws change, one constant feature is that parents can usually obtain some form of financial benefit when they are able to claim a minor child as a dependent on their tax return. After parents divorce, one question a McKinney child custody lawyer often receives is “can we both claim the tax benefits?” Parents also usually want to know whether the tax benefits are based on custody arrangements.
A child custody lawyer is not experienced in tax matters the same way that an accountant or tax attorney would be. However, guidelines from the Internal Revenue Service (IRS) make it possible to give parents some general answers to these questions.
Can Parents Split a Child’s Tax Benefits?
Couples who are married and file a joint tax return share the tax benefits of the children born to them or adopted by them. If parents are divorced, never married, or file separate tax returns, generally only one parent may claim tax benefits for a child.
In many cases, parents take turns, alternating years where they claim the tax credits or other benefits associated with a child. If a couple has more than one child together, they can split the children between them, but they cannot divide the benefits pertaining to a single child. For instance, a couple with three children might allow the mother to claim two children while the father claims one. The next year, they might reverse that ratio.
IRS Rules About Which Parent is Entitled to Tax Benefits
Generally, the IRS grants the Child Tax Credit and other benefits like credits for childcare expenses to the parent with whom a child lives the majority of the time. However, that parent can execute an IRS Release of Claim Form to allow the other parent to claim benefits. Very often if one parent is paying considerable child support while the child lives primarily with the other parent, the parents may agree to allow the non-custodial parent to claim tax benefits.
Factors to Discuss with a McKinney Child Custody Lawyer
While tax issues may be at the forefront of many people’s minds in mid-April, they often get ignored the rest of the year. Rather than waiting until the last minute, it is wise to plan ahead with a McKinney child custody lawyer to reduce confusion and delays at tax time.
An attorney could negotiate an agreement between parties regarding tax benefits and obligations. Parents might work through their attorney to discuss other tax issues such as Head-of-Household filing status and home mortgage deductions.
It is a good idea to review decisions and get release forms and other paperwork resolved early in the year. If one parent attempts to claim a child on their return after another parent has already done so, the duplication sends up a red flag in IRS computers and can prevent acceptance of the return. Duplication could lead to substantial penalties as well.
Get Help from a McKinney Child Custody Lawyer
The relationship between parents changes and evolves for years after a divorce. A McKinney child custody lawyer is ready to help parents reduce conflict and establish solid legal arrangements for handling changes, whether it involves a change in financial arrangements, custody, visitation, or other matters. For a free consultation with a dedicated child custody attorney at Nordhaus & Nordhaus, PC, contact us today.
Categories: Family Law & Divorce