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Georgia Case Law Update – Hulsey v. Hulsey

In divorce cases, there are some issues that are black and white, and upon which a court has no discretion. One of those issues is who gets the federal income tax dependency exemption. The Supreme Court of Georgia just addressed this very issue in Hulsey v. Hulsey. Hulsey v. Hulsey, S16F0940 (October 31, 2016). In that case, the parties were divorced after a hearing in Dawson County. In the divorce decree, the judge provided that the mother could claim their three minor children as dependents on her tax returns in alternating years. The father appealed, alleging that the trial court did not have the authority to make that award since he had custody of the children for the greater portion of each calendar year.

The Supreme Court of Georgia agreed with the father, citing well-established Georgia law that “Georgia courts do not have the authority to award the federal income tax dependency exemption to a non-custodial parent.” Id. (citing Blanchard v. Blanchard, 261 Ga. 11, 15 (401 SE2d 714 (1991)). There was no dispute that the father had custody for the majority of the calendar year and, therefore, the court was not authorized to prohibit him from claiming the exemption.

It should be noted that, although the courts do not have the authority to award the dependency exemption to the non-custodial parent, the parties could agree otherwise in their settlement discussions. If the custodial parent agrees to forfeit the dependency exemption for settlement purposes, then the court can sign off on it. Often, this issue is something that can tip a case toward settlement because it can save the higher income earner a significant amount of money in taxes. If the divorce does not settle however, this issue is off the table, as the exemption will automatically go to the custodial parent, regardless of income.

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Taxes
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