Child Tax Issues: Who Gets To Claim The Children On Their Tax Return?

When the new year rolls around, and it's time to file your taxes, if you have dependents, it means big tax credits that can save you a lot of money or even land you a refund. When two parents are divorced but share children, it can mean disputes arise about just who gets to claim those children on their taxes. Some people assume that the parent who has primary custody gets to claim the children involved for tax purpose,s but this is not always the case. Here's a look at some of the things you should know about children and tax-filing issues between divorced parents. 

It's best if guidelines are included in the divorce decree.

Things like alimony and child support are included in a divorce decree when there are children involved or monetary payments to be made to one spouse or the other. However, most divorced parents have no idea that who gets to claim the children on their taxes can also be included. If you can work it out with the other parent so that you always get to claim the children, it is best to have this information included in the decree, so there is no confusion going forward. 

Only the parent who claims the children first will actually get to do so. 

If there are no prearrangements in the divorce decree about who gets to claim the children for tax purposes, communication is necessary between the two parents. In a situation where both parents try to claim the children for the full year on their taxes, the IRS will only accept the return that claimed the children first. If you can communicate with the other parent, so you both don't try to claim your children on your tax return, it will avoid any unnecessary confusion. 

A parent with the highest AGI may have a right to claim the children. 

There are a few rules that come into play with the IRS where claiming children are concerned when the parents are divorced. One of those rules is that the parent with the highest adjusted gross income (AGI) gets to claim the children. So even if you share joint custody, if your ex-spouse has a higher income than you, they may be able to claim the children on their return when you cannot. 

In the end, filing taxes after a divorce when there are dependents involved can get pretty complicated. If you need guidance, reach out to a local law office like Armstrong Betker and Schaeffer PLC for some advice about how you should handle tax-filing situations.