Many people going through a divorce have questions about what to do about claiming their dependent children on their tax returns. When and how a person can claim a child following a divorce depends on several factors.
In Ohio, Courts may accept the agreement reached by the parties. If no such agreement exists, the Court must then award the tax exemption to the parent for whom the exemption would serve to further the child’s best interest. There are several variables to this test including: net tax saving, the financial condition of both parties, the amount of time each spends with the child, the eligibility of either party for the earned income tax credit and a catchall category of “any other relevant factor.”
Judges should not automatically award the exemption to the party with the higher income; a real balancing test should take place. It’s also important to realize that at high-income levels the exemption is phased out, thus reducing its value to that party. The same thing occurs for those receiving the earned income tax credit, as they may not receive the full value of the exemption.
These Ohio specific rules can also be affected by the criteria set forth by the IRS. First, and fairly obviously, the child in question must actually be your child or a descendent of your child. This can be either through birth, adoption or foster parenting. The child in question is also permitted to be a sibling, half-sibling, stepsibling or a descendant of any of these.
The child also needs to be younger than 19, or 24 if he or she is a full-time student. Another odd but fairly obvious requirement is that the child be younger than the person claiming him or her. The only caveat to the age requirement is if your child is permanently disabled, in which case you can claim him or her as a dependent regardless of age.
Beyond these two factors, the IRS also looks to the child’s residency throughout the year. Typically, you are permitted to claim a child as a dependent if he or she resided with you for more than half of the year. Of course, in shared custody situations, this can get tricky. The residency requirement means that parents with primary custody of their child will usually be the ones who are able to claim them as dependents.
Ifadditional factors have been met it’s possible for a non-custodial parent to claim a child as a dependent. First, the parents must be legally divorced, separated under a written separation agreement, or be living separately for at least the past six months. Second, the child must have received more than half of his or her financial support over the year from one or both parents. Third, the child must have been in the custody of one or both of the parents for more than half of the year. Fourth, the custodial parent who would otherwise be able to claim the child must sign a form declaring that they will not claim that child as a dependent for that tax year. The non-custodial parent must then attach this declaration to their tax return.
Determining exactly what “non-custodial parent” means is complicated. According to IRS rules, the custodial parent is the parent with whom the child lived for the greater number of nights in the year. If the parents separated during the tax year in question, and the child lived with both parents prior to their separation, then the custodial parent is the one with whom the child lived for the greater number of nights after the separation.
In the rare event that a child spent an exactly equal number of nights with both parents, then, oddly, the custodial parent is deemed to be the one with the greater adjusted gross income.
If you find yourself facing the prospect of divorce, contact an experienced Ohio family law attorney who can help guide you through the difficult process. Count on the expertise of Twinsburg family law attorney Carol L. Gasper.
Source: “Claiming Children as Dependents After a Divorce,” by Amanda Gilloly, published at Patch.com.
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