When parents of a child seek a divorce in Texas, the issues can be complex and emotional. In many ways, the laws have become more flexible when it comes to child custody and visitation issues. People in Fort Worth may have hectic schedules, and that includes the schedules of children. Determining a workable parenting plan can be an important aspect of resolving issues in a divorce.
Notably, parenting plans and custody scheduling can vary widely from divorce-to-divorce. What may work in one situation may not be as beneficial in another. The amount of time kids spend with one parent might not always be an even split. When one parent has custody of the child for a greater amount of time (generally based upon the total number of nights the child resides in the parent’s home) in a given year, the federal government considers that parent the custodial parent for the purposes of the income tax dependency exemption laws.
Federal income taxes are not a matter of Texas law. The IRS says that the custodial parent is entitled to claim a child for the purposes of the exemption. As we head toward the income tax filing deadline, some newly divorced parents may not be aware of how to handle the exemption.
The IRS recognizes that some situations are different from the general rule, and divorcing couples may address exemption issues during a divorce proceeding.
Parents may negotiate who claims a child on income taxes during a divorce. The IRS will respect these kinds of agreements. Only one parent may claim a child as a dependent in any single year. Some parents may agree to alternate years in claiming the exemption. Other parents may agree to allow a noncustodial parent to claim a child for the purposes of income taxes. Under current law, the IRS uses form 8332 to address the issue on a tax return when parents have an agreement in a divorce decree.
The exemption is different than child support issues. The IRS says that child support is non-taxable. That means a parent who pays child support cannot deduct the money and child support payments are not taxable income for the parent receiving the payments.
Source: The Huffington Post, “Children of Divorce: Who Gets the Tax Exemption?” Stann Givens, March 13, 2014