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Texas Divorce and Prenuptial Agreement

4550 Post Oak Place, Suite 201 • Houston, Texas 77027-3139

Phone: 713-877-8800 • Fax: 713-877-1229

Divorce Can Complicate Dependent Tax Exemptions

Claiming a child as a dependent on your tax return offers a number of tax advantages like deductions and credits, but who gets to claim dependents is not always straightforward for divorced couples with children. Only one parent can claim each child as a dependent on the parent’s tax return. This is easy to sort out when one parent has complete custody over a child and the other has periodic visitation rights. The situation becomes more complicated when the couple splits time with their children.

Here are some of the variations that can change how the Internal Revenue Service (“IRS”) grants dependent exemptions:

  • A divorce decree from before 2008 can specify who gets the dependent exemption. The decree can do this even to give the exemption to the parent who does not have custody.
  • For couples divorcing after 2008, there is an IRS form that permits the custodial parent to give up the exemption. The parent without custody then uses that completed form when filing his or her tax return to use the dependent exemption.
  • If a child spends the same number of nights with both parents over the course of the year, custody (and ordinarily the dependent exemption) goes to the parent with the higher gross income.
  • Otherwise, in most cases where a child spends more time with one parent, that parent will be the one who is able to use the dependent exemption.
  • For divorced couples with more than one child, the couples may be able to reach an agreement whereby they split the dependent exemptions based on the number of children they have. Some couples also alternate exemptions from year to year, or determine exemptions based on who can take the most advantage of the exemptions.

How do you and your ex-spouse deal with the dependent exemptions when it comes to tax time?

John K. Grubb & Associates, P.C. – Houston divorce lawyers

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