Claiming Child Support and Dependent Exemptions After Divorce

Tax exemptions and deductions: We all want them, but sadly, not everyone is eligible for tax breaks. This is no different for parents who are sharing financial responsibilities for their kids after a divorce. When you are paying child support and attempting to calculate fair financial terms, tax information becomes more important than ever. The ever-present question for Maryland co-parents is simple but not always easy to answer. Who gets the exemption?

In most cases, the custodial parent is permitted to claim the dependents on their federal tax return, which means that person receives the deduction. Decades ago — when moms were almost always the primary custodian — such calculations were relatively simple. With the advent of new child custody-sharing strategies, however, the financial needs of the kids are often met by both parents to some extent.

By default, the person with whom the child spends the most nights is considered the custodial parent and receives the exemption. However, parents may enter into independent agreements to accommodate their payments for their children’s financial needs. Many parents trade off claiming the exemption, with mom taking the even years and dad taking the odd, for example. Those divorce court orders may be accepted by the Internal Revenue Service if simply attached to the tax return, though some recent divorcees may be required to file a special form.

It is important to remember that special tax laws also apply to those who pay Maryland child support. In many cases, such amounts may be eligible for certain considerations designed to limit the financial hardship on one or both parties. A family attorney in Maryland may be able to provide additional information about meeting the best interests of the child while still protecting your bank account at tax time.

Source: Huffington Post, “Children of Divorce: Who Gets the Tax Exemption?” Stann Givens, Mar. 13, 2014