If you're a parent whose divorce will be finalized by Dec. 31, you may have a question or two about divorce, kids and taxes. Sounds like an unusual combination, but once you're divorced, each will play a role in how your taxes are filed.
We will begin by answering a question that comes up a lot.
"As a divorced parent, can the noncustodial parent claim the dependency exemption?" Generally, no. Only one party can claim all of the child-related tax benefits for the child, including:
- Dependency exemption,
- Child tax credit,
- Dependent care credit,
- Exclusion for dependent care benefits,
- Earned income tax credit (EITC), and
- Head of household filing status.
However, there is one exception to the rule, and this involves separated or divorced parents who have lived apart for at least 6 months of the year. In this situation, the noncustodial parent may claim the dependency exemption if the custodial parent agrees to it.
The noncustodial may also claim the child tax credit so long as the other requirements for the child tax credit have been met.
As far as the "dependent care credit" goes, only the custodial parent may claim this. Usually, only the custodial parent is allowed to claim the EITC.
Generally, a child can be considered the "qualifying child" for the noncustodial parent (for the purposes of the child tax credit and an exemption, but not the EITC) when the parents:
- Are legally divorced or separated,
- Have a written separation agreement, or
- Have lived apart continuously for the past 6 months, whether they were married or not.
- The child received over half of their support from the parents for that year.
- The child has been in the custody of one or both of their parents for more than half of the year.
For the noncustodial parent to claim the child on their taxes, the custodial parent will need to sign Form 8332 stating that he or she won't claim the child as a dependent for that year. Then, the noncustodial parent would attach that form to his or her tax return.
If you're searching for a Los Angeles divorce attorney, contact Claery & Hammond, LLP !