Child Support and Taxes
Filing your taxes following a divorce may become an arduous task with many complicated aspects that you have never been forced to deal with before. It is important to note that while child support is tax-free for the purpose of federal income tax, child support payments are not tax-deductible by the parent who makes the payment.
It is vital to be clear about how your payments are characterized in your settlement agreement, as the language in this document will determine how your payments are treated for tax purposes. These issues are complex, and an experienced Austin custody lawyer from Slater Kennon & Pugh Ltd. LLP, can help you to understand how your custody arrangement will affect your tax payments. Contact us at 512-472-2431 today to learn more.
Claiming a Dependent
One of the more confusing issues revolving around child support payments and custody agreements is which parent is allowed to claim the child as a dependent on their tax return. The IRS will not allow a two divorced parents to simultaneously claim a child as a dependent, and there can be severe repercussions if this is attempted.
Generally speaking, the custodial parent (the parent who has had custody for the majority part of the tax year) is permitted to claim the child as a dependent, but there are a couple of circumstances in which the non-custodial parent may claim the exemption, such as:
- A provision in the divorce agreement in which the custodial parent waives the right to claim the exemption.
- The custodial parent relinquishes the right to claim the dependent using IRS form 8332 and the noncustodial parent attaches this form to their tax return.
In circumstances where a divorce agreement is not in place or the parents are still living together, the parent who provides more that 50% of support for the child may claim the exemption.
Contact Us
If you have questions or concerns about your tax status regarding the custody of your child following a divorce, the experienced and knowledgeable Austin custody lawyers of Slater, Kennon, & Pugh Ltd. LLP, can help resolve these issues for you in an effective and efficient manner. Contact us by calling 512-472-2431 for a free consultation to discuss the details of your case.