Can Both Parents Claim Their Child on Their Tax Returns?

Raising children is costly, especially for divorced parents.  Both California and the federal government offer tax credits to help offset some of these expenses.

But what happens when parents live apart? Can both parents claim their child on their tax returns?  If you pay child support, do you automatically get to take the tax benefits?

Taxes are an ongoing issue parents have to deal with yearly. So, it is wise to take steps to understand and address tax issues ahead of time, particularly if you are in the process of establishing the terms of your divorce settlement and want to make the best decisions for your household.

Status as a Dependent Matters and Children Can Only Be Claimed on One Tax Return

A child can only be claimed as a dependent on one tax return per year.  Even if parents are married but file separately, only one can claim the child.  This does not mean parents cannot share tax benefits; they just need an agreement, often part of a divorce settlement.  For example, parents may alternate claiming the child each year.  Or, if the parents have two or more children, they each can claim a child.

The Federal Government Assumes the Parent with Custody is Claiming the Tax Credits

Even in situations where a noncustodial parent is paying the vast majority of a child’s living expenses, the federal government will assume that the custodial parent – the one with primary physical custody – is the one who has claim to the federal tax credits.

It is possible for the noncustodial parent to claim the child on their taxes and claim the tax credits, but only if official forms are correctly submitted with the rest of their tax documents.

Contact Cardwell, Steigerwald Young to Ensure that Tax Credits are Fairly Distributed

Since a parent might be able to claim tax credits on both their California and federal tax returns, the resulting monetary benefits could result in significant sums of money. It makes sense to develop a fair system for tax credit allocations – and an experienced family law attorney can help create an enforceable plan. Contact the San Francisco family law attorneys at Cardwell Steigerwald Young, LLP to discuss your family’s situation today.

Sources:

irs.gov/faqs/filing-requirements-status-dependents/dependents#:~:text=No%2C%20an%20individual%20may%20be,child%20of%20the%20custodial%20parent.

irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules