Can I Claim My Child/Children as Dependents on My Taxes?

Author: Kristen Rushing

It’s that Time of Year Again!

I pay child support, shouldn’t I be able to claim my children as dependency exemptions?  This is a common question that family law attorneys hear this time of year.  Unfortunately, the answer is not always a simple one.

In a divorce situation who has the right to claim the child as a dependent and what exactly does that mean?  According to the Internal Revenue Service the party with whom the child resides with the greater number of overnights is the eligible parent to claim that child as a dependent.  Claiming a child as a dependent then allows a parent to take the Child Tax Credit, which in 2022 is a $2,000 per dependent credit against your modified adjusted gross income, which can in turn result in a higher refund or a lower tax liability. I.R.S. Pub. L. No. 501 (2022)(codified in 26 U.S.C. §1).  However, it does not always make the most financial sense for the primary custodial parent to claim the child.  For example, if the other parent earns more money it might be more beneficial for everyone involved for the higher earning parent to claim the child as a dependent.  In those situations, the custodial parent can release the dependency exemption and then the other parent is free to claim the child as a dependent. I.R.S. Pub. L. No. 501 (2022)(codified in 26 U.S.C. §1).  You may be asking yourself why the higher earning parent who has less time with the child should get a tax break?  The idea behind it is that it ultimately results in more income available to calculate the obligor’s child support payment.  However, keep in mind, there are income thresholds when it comes to the Child Tax Credit, so the higher earning party, may not actually be able to benefit from the credit depending on their income. 

What if I have equal time with my children?  This is another common question that comes up when it’s time to file taxes.  In this situation where both parents have equal overnights with their children, the IRS looks to the higher wage earner. I.R.S. Pub. L. No. 501 (2022)(codified in 26 U.S.C.§1).   The idea again is that the higher wage earner generally sees the greater tax benefit from claiming the dependency, meaning he or she will be left with more money in their pocket at the end of the day.  More money in the pocket, means more money on the table available for child support, which in turn usually results in a higher child support payment to the lower wage earning parent. 

If both parties make relatively similar incomes and share equal custodial time, it often makes sense to alternate the dependency exemption each year or if there are multiple children the parties can each take a child(ren) in a given year. 

It is always best to consult with your lawyer on these issues, however, we here at Sweeney & Neary, LLP are not tax attorneys or accountants, so we strongly recommend consulting with a tax attorney or your accountant for further information and advice before filing your taxes.