Divorce: Who Gets the Child Tax Exemption and Deduction?

Jonathan Merel

In any divorce proceeding, the issue of which party will have the right to claim the child or children for tax purposes must be determined either by agreement or by a judge.

As any parent knows, receiving a child tax exemption can often be an opportunity to save a substantial amount of money come tax time. The Internal Revenue Code 152(e) clearly states that the custodial parent is entitled to the dependency exemption for their child; however, with many modern child visitation schedules providing increased parenting time for the non-residential parent, it is not always clear who should have the right to the tax benefits associated with the child.

Modern parenting schedules often involve many working parts and frequent transitions between both parents’ homes. For example, a modern child visitation schedule may grant parenting time to the non-residential custodial parent every weekend and a day or two days every week. As a result, the answer to the question of which parent should claim the child tax exemption is not so clear. In situations where parenting time and child support are shared by both parents, Illinois Courts tend to view a child tax exemption as a valuable asset that should be split equally. While the residential custodial parent still has the majority of parenting time, most judges view the value of a child tax exemption to a parent to outweigh the minimal disparity between parenting time.

In a situation where the parties only have one minor child, splitting the tax exemption is relatively easy. One parent claims the child for tax purposes during even years, the other parent claims the child for tax purposes during odd years. When there are two or more children at issue, judgments require detailed language outlining a set a schedule for each parent to follow come tax season.

Most often, parents agree to these child tax deductions before it becomes of issue before a judge. In all cases, the parent not claiming the child during any given tax year must complete IRS Form 8332 (https://www.irs.gov/pub/irs-pdf/f8332.pdf) which releases and authorizes the other parent to claim the parties’ child tax benefits.

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