As income tax season is quickly ramping up, I am commonly asked by clients which parent can claim the children as dependents when they are separated from the other parent. And like any good lawyer, I often say it depends.
So what exactly does it depend on? According to the Internal Revenue Service, in order to claim a child as a dependent he or she must be a qualifying child. Assuming your children are qualifying children, only one exemption can be claimed per qualifying child. The IRS has determined that the “custodial parent” gets the to claim the exemption. The IRS has its own definition of “custodial parent.” According to their regulations, a custodial parent is the parent with whom the child lived for the greater number of overnights in the calendar year.
So what if you and your ex have shared custody? The IRS has a standard for that as well. If you have shared custody, the exemption goes to the parent with the higher adjusted gross income. Now, unlike most IRS regulations, just because the IRS has set this standard, it does not mean you and your ex must follow it. You are free to agree to something different. However, this standard is the fall back if you fail to agree. When deciding to diverge from the set standard, the custodial parent must sign a written declaration that they will not claim the children as dependents in that year. The noncustodial parent must attach that written declaration to his or her return. If you have multiple children, you can decide to split which parent claims which child. In that case, you only need the form for the child being declared by the noncustodial parent.
Now here comes the disclaimer – I am not an accountant and cannot give you tax advice. If you are unsure how this applies to you or have other tax questions, you should consult with a qualified tax professional.