Divorce touches on every aspect of life, including taxes. So, as Atlanta divorce attorneys, it is not uncommon for clients to seek our advice on divorce related tax concerns. One of the most common questions we get concerns taxes and child support, specifically: “Can I claim my children as dependents on my taxes if I pay child support?” Generally speaking, IRS rules only allow custodial parents to claim the dependency exemption for his or her qualifying children. For income tax purposes, the IRS defines the custodial parent as the parent with whom the child lived for the greater part of the year. So, even if you are paying child support for the child’s benefit, you will likely be unable to claim your children as defendants on your taxes if you are a non-custodial parent.
Although only the custodial parent is entitled to claim the dependency exemption in most cases, a noncustodial parent may be able to claim the exemption if the special rule for children of divorce or separated parents applies. This rule only applies if:
- One or both parents provided more than half of the child’s total support for the year;
- One or both parents have custody of the child for more than half of the year; and,
- The parents are divorced, legally separated, or lived apart at all times during the last six months of the year.
If all the above conditions are met, and the custodial parent signs a “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent” (IRS Form 8332), or provides a substantially similar statement to the non-custodial parent, the non-custodial parent may claim the dependency exemption for any qualifying child. It is important to remember though, that the Form 8332 or similar statement must be signed by the custodial parent, and the non-custodial parent seeking to claim the exemption must attach the form or statement to his or her tax return.
If you are a non-custodial parent seeking to claim the dependency exemption for your children, or you are currently going through the divorce process and are unsure how to resolve this issue, it is important to discuss your options and the specifics of your case with your divorce attorney and a certified public accountant or certified tax preparer.