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Who Claims the Child With 50/50 Parenting Time? | (Equal)

The parent who qualifies as the “custodial parent” under federal tax law is the one who claims the children as dependents. The IRS explains, “Generally, the custodial parent is the parent with whom the child lived for a longer period of time during the year.” Because there is no such thing as joint custody, read on to learn about how the IRS treats divorced parents.

 

The Parent with 183 or more Overnights is the “Custodial Parent”

In general, the “custodial parent” is the parent with 183 overnights or more. When parents share parenting time equally (50/50), one of the two parents must have at least one more overnight than the other because there are an odd number of days in a year (365). In most cases, one parent will have 183 overnights and the other will have 182 overnights. The one with 183 overnights is the parent who is entitled to federal and state tax deductions and exemptions. 

Under the IRS’ regulations, there is no such thing as “dual-custodial parents” when you have equal or joint custody. Therefore, one or the other parent must claim the tax benefits, but not both.

 

It is Better to Agree on Who Will Claim the Tax Benefit

Even though you may think you have 183 overnights in a year, a long vacation or a strange circumstance concerning holiday parenting time may cause the other parent to have more parenting time in a particular year. Because of this unique nuance in the law, it is often best for parents to decide who will claim the child on their taxes for each tax year. 

Many parents who have equal parenting time will simply divide the tax benefits and alternate years where the child will be claimed by one parent the first year, and the other parent the second year. Parents with multiple children will sometimes allocate the child credits where one parent claims the same child every year and another parent claims another child. Parents with three children will often allocate one child to one parent, allocate a second child to the other parent, and then alternate years for the third child.

 

Unique Issues Related to Child Tax Benefits

There can be unique circumstances where you may want to obtain legal advice. In some situations, one of the parents does not qualify for the child tax credit or dependent care credit because they earn too much money or have some other disqualifying circumstance. In that situation, it may make more sense for the parent who does qualify for the credit to claim all the exemptions and deductions for the child or children. Many agreements will state that where one parent receives no benefit from a credit or deduction, the other parent is entitled to take the deduction.

Another consideration that you may want to take into account is whether one of the parents contributes much more money to the children’s support than the other parent. There may be a basis to seek a court order to claim the child on your taxes.

Take for example a family where the parents live in different states. Perhaps one of the parents has more time with the children because they are the ones who live in the state where the children go to school. However, the other parent contributes much more money to support the children. In that case, the court may allocate the tax credit to the person providing more financial contribution than to the person with more parenting time. 

 

Common Types of Tax Credits Available to Divorced Parents. 

There are a huge number of benefits, exemptions, and credits that someone can qualify for under federal and state tax law. However, here are a few of the main ones:

    1. Child Tax Credit;
    2. Child and Dependent Care Credit;
    3. Head of Household Status; and,
    4. Earned Income Tax Credit.

All of these tax exemptions, deductions, and credits raise complex issues concerning both federal tax law and state domestic relations law. To make things easier though, you should always consider the tax consequences of your decisions when you are getting divorced. 

When negotiating a parenting plan, thinking about these issues beforehand and allocating the exemptions and credits to the correct person will reduce arguments in the future. 

Our attorneys have experience dealing with these sorts of issues, and can help you negotiate a settlement or parenting plan that considers all the benefits and costs associated with the various tax structures and the way in which these deductions and exemptions are treated in your particular case.