Who Claims The Child on Taxes With Joint Custody

Many people wonder if their ex-spouse can claim the child on their taxes when they have joint custody. The answer is yes, but only if the divorce decree gives both spouses guidelines for claiming their children as dependents. If you have questions about a specific case, talk to an experienced family law attorney who understands the implications of a divorce or separation agreement. 

(Searching for “Missoula attorney“? Visit our website!)

The IRS considers the parent with whom a child spends the most nights during the tax year as the custodial parent. This is a rule known as the residency test, and it is an important step in understanding who should claim the child on your taxes. 

In a typical shared parenting arrangement, a child will have 183 overnights with one parent and 182 overnights with the other. This means that the parent with the most time with the child will have the right to claim the child on their taxes, and this is usually the custodial parent. 

However, there are exceptions to this rule. If the parent who has custody releases the right to claim the child on their taxes by completing IRS Form 8332, or a similar statement, then the noncustodial parent can claim the child as a dependent if they attach the form or statement to their tax return each year they claim the child. 

This release can be in writing, and it may be in the best interest of both parties to have this type of agreement in place. It can be especially useful in situations where the custodial parent has a high income or is involved in a career that requires a lot of travel to get to work and back home. 

Another example of a situation where the custodial parent could release the right to claim their child on taxes is when they contribute significantly more to the financial support of the children than their spouse. In that case, the court may allocate some of the credit to the person who provides more financial support to the children. 

Tie Breakers & Special Rules

If both parents have equal custody, the child will be considered a qualifying child for each of them and both parents can claim it as a dependent. The tiebreaker is the parent with the higher adjusted gross income. 

It is important to note, though, that the child may be a qualifying child for more than one parent, and they may have different adjusted gross incomes. In that case, the exemption is split up and goes to the spouse with the highest adjusted gross income. 

Often, these two families live in different states. The parent who lives in a state with more tax credits may be able to claim more of the credit. 

A common practice among parents with 50/50 custody is for each parent to claim the child as a dependent in even years, and to the other parent in odd years. This is a great way for both parties to make sure they are taking advantage of all the tax credits available to them and it also ensures that both parents get the same amount of the child care tax credit.