Channa Ramirez
Channa Ramirez
Channa Ramirez
,
EA
Channa Ramirez
,
EA
Channa Ramirez
Dependency Exemptions for Children of Divorced Parents

Dependency Exemptions for Children of Divorced Parents

The end of a marriage brings many changes and when children are involved, an extra layer of complexity is added. After the divorce is finalized, questions may arise that you  did not think of before, such as: who claims the children on their tax return?

The Tax Cuts and Job Act (TCJA) of 2018 brought an end to dependent exemptions on tax returns; however, the parent who claims the child(ren) on his or her tax return may be eligible for the Child Tax Credit, Dependent Care Credit, Earned Income Credit, and credits for higher education costs. Claiming a child as a dependent can also mean a change in filing status—from Single to Head of Household, the latter providing a higher standard deduction and more favorable tax brackets. While some divorce decrees explicitly list out who is eligible to claim the children in terms of taxes, those directives may not align with the IRS rules on claiming a dependent. After a divorce is final, situations may change, potentially altering who is eligible to claim the children on tax returns.

Before you claim your child as a dependent on your tax return, make sure you qualify under the IRS rules:

  • To be a qualifying child, the person  must be your biological, step, or foster child; your sibling; or descendants of any of these.
  • Assuming the above condition is met, the next requirement is that the person be under the age of 19, or under 24 if a student, at the end of the year; younger than you; or permanently and totally disabled.
  • The next test the IRS applies is with whom the child lived with for more than half of the year. Temporary absences such as attending college, overnight summer camp, or extended hospital stays do not preclude you from claiming a child as a dependent. When determining residency, the parent who had custody the majority o f the year is the person who can claim the child. If the case arises where the child spent an equal amount of time with each parent, then the person with the higher Adjusted Gross Income (AGI)  will claim the child on his or her return.
  • The child must not have provided more than half of their own support during the year.  Working and earning income at a part-time job is generally okay; you may still claim him or her as a dependent so  long as the above conditions are met.
  • Finally, if your child meets all the previous tests, but is married, then additional rules apply, and it is best to discuss with a tax professional to determine eligibility for claiming as a dependent.

Situations may arise where the custodial parent allows the noncustodial parent to claim the child(ren) on their tax return. This can be done with additional forms, however claiming Head of Household and some credits will not be allowed. If this issue or another arises, contact ADKF for assistance.


ADKF
is the largest, locally owned public accounting firm in San Antonio, Texas, with branch offices in Boerne and New Braunfels. We have been serving our community since 1991. We are a full-service CPA firm dedicated to providing a broad range of tax, audit, bookkeeping, tax controversy, and consulting services with superior customer service to help our clients meet their goals and objectives. Please click here to set an appointment with us.

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