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How does child custody factor into taxes?

On Behalf of | Feb 3, 2021 | Family Law

There are a number of things to consider when divorcing with children, including how to handle custody. Child custody can be shared in a number of different ways in Texas. For example, it might be in a child’s best interests to live primarily with just one parent while having visitation with the other. Another child might benefit more from living with both parents for roughly equal amounts of time. In both of these situations, parents should be aware of who gets to claim the child for tax purposes.

Claiming dependents after divorce

In general, the custodial parent gets to claim his or her child as a dependent when filing taxes. A custodial parent is the one with whom the child lives with for the majority of the year. This does not mean that it is impossible for a noncustodial parent to ever claim his or her child, though. If the custodial parent chooses, he or she can fill out a form from the IRS allowing the noncustodial parent to claim the child if:

  • the parents have been divorced for six months or longer out of the year
  • the child is in at least one parent’s custody for half the year
  • one or both parents provide at least half of their child’s support

Things are not always quite so clear when parents share joint custody. In such cases, parents often choose to alternate years, with one parent claiming children one year, and the other parent claiming them the next. While parents might have a verbal agreement as to who gets to claim the children and when, it is generally best to have it in writing in the custody agreement. This can eliminate unnecessary fighting in the future.

Taxes might be the last thing on one’s mind when trying to figure out the best possible child custody agreement. This is understandable, since most parents are simply trying to do what is best for their children. However, since Texas parents are generally focused on their children’s well-being during divorce, it might be a good idea to seek out help from someone who can help look out for their own interests, too.