Everyone will probably agree that filing income taxes can be complicated. Divorce muddies the income tax water even more, especially when there are children involved.
Divorced or divorcing parents often ask the following two questions about income taxes:
- Which parent can claim the children as dependents?
- Can the parents agree who may claim the children as dependents?
Which parent can claim the children as dependents?
Under Georgia divorce law, the primary physical custodial parent may claim the children as dependents and receive any tax exemptions. Georgia courts do not have the authority to award the federal income tax exemption to a non-custodial parent. The only way a non-custodial parent can claim the children as dependents is through an agreement by the two parties.
According to the Internal Revenue Code, the term ‘custodial parent’ means the parent having custody for the greater portion of the calendar year.
What that means is that the child must receive over half of his/her support and have lived with the parent claiming the child as a dependent for more than half of the year.
Can the parents agree who may claim the children as dependents?
Yes. Where there is an agreement by both parents, Georgia courts will allow the parents to agree that one parent will receive the income tax exemption each year or that the parents will alternate years in which they may claim the children as dependents and receive any tax exemptions.
For example, one parent may receive the income tax exemption for even years and the other parent will receive the income tax exemption for all odd years.
However, there are certain steps the parties must take when the parents agree that the non-custodial parent may claim the children as dependents and receive any tax exemptions.
- The custodial parent must sign a written declaration (Tax Form 8332) that he/she will not claim the children as dependents for that tax year.
- The non-custodial parent must attach the declaration to his/her own income tax return.
Only when these two requirements are met can the non-custodial parent claim the children as dependents and receive any income tax exemptions or benefits for the children.
Tax Exemptions for Children
The parent that claims the children as dependents will receive any qualifying tax benefits and exclusions such as exemptions, child tax credit, head of household filing status, any credits for child and dependent care expenses, income exclusions for dependent care benefits and the earn income tax credit.