Who’s Allowed to Claim a Child on Their Taxes After Divorce?

Divorce can be an overwhelming process, particularly when it involves children. One of the many questions that arise during divorce proceedings is: “Who’s allowed to claim a child on their taxes after divorce?” Understanding Indiana’s tax laws concerning child dependency exemptions and custody agreements is crucial for divorced parents as these laws directly impact their financial planning.

Understanding the Basics of Child Dependency Exemptions

In Indiana, as in other states, the IRS rules generally grant the custodial parent—the parent with whom the child lives for the greater part of the year—the right to claim the child as a dependent. This exemption can significantly affect tax calculations, reducing taxable income and potentially qualifying the parent for other tax benefits such as the Earned Income Tax Credit and the Child Tax Credit.

Custodial vs. Noncustodial Parent

• Custodial Parent: The parent with whom the child resides for more than half of the year.
• Noncustodial Parent: The parent with whom the child spends less time.

Typically, the custodial parent has the primary right to claim the child on their taxes. However, certain agreements or court orders can change this arrangement.

Child Custody Agreements and Tax Exemptions

Indiana law allows for flexibility in deciding which parent claims the child as a dependent. This decision can be outlined in the divorce decree or child custody agreement, often based on negotiations between both parties.

Common Scenarios

Standard Custody Arrangement:

• In most cases, the custodial parent claims the child on their taxes because the child lives with them for a greater part of the year.

Noncustodial Parent Claims the Child:

• The custodial parent may release their claim to the dependency exemption to the noncustodial parent by signing IRS Form 8332, which the noncustodial parent must attach to their tax return each year they claim the child.

Alternating Years:

• Parents may agree to alternate the years they claim the child as a dependent. This is particularly common in joint custody situations where the child spends significant time with both parents throughout the year.

Multiple Children:

• If the couple has more than one child, they might decide to split the dependency exemptions, with each parent claiming one or more children.

Legal Implications and Considerations

• Best Interest of the Child: All decisions regarding claims should align with the child’s best interest. Financial benefits should ideally support the child’s welfare.
• Tax Benefits: Besides the dependency exemption, parents should consider eligibility for tax credits like the Child Tax Credit and the Earned Income Tax Credit.
• Court Orders: Any arrangements made should be documented in the divorce decree or a formal written agreement to avoid disputes and ensure compliance with IRS requirements.

Contact Us for Guidance

Determining who can claim a child on their taxes post-divorce in Indiana involves navigating through state laws, custody agreements, and IRS regulations. At The Bellinger Law Office, we understand that these matters can be challenging and emotionally charged. Our experienced Fort Wayne attorney, Robert Bellinger, is here to guide you through these intricate situations, ensuring your rights and interests are protected.

For personalized legal advice and to discuss your specific circumstances, please contact The Bellinger Law Office. We’re committed to helping you achieve the best possible outcome for you and your family.