Who Claims Child On Taxes with 50/50 Custody?
Under federal law, the parent who qualifies as he custodial parent is the one who can claim the children as dependents. Generally, this is the parent who has lived with the child for a longer period during the year as explained by the Internal Revenue Service (IRS). Under the same provisions, there is no such thing as joint custody, which makes it imperative to understand who claims a child on taxes with 50/50 custody.
Understanding Who Claims Child On Taxes with 50/50 Custody
Relationship statuses often complicate taxes, with divorce or separation changing your filing status including who you can claim as dependent on your tax return. Even if you are still married, you may still question whether both you and your spouse can claim dependents, especially if you file separately.
The IRS allows parents to reduce their tax liability by claiming a dependent child on their tax return. This offers several benefits, such as helping you qualify for certain deductions and tax credits that could lower your taxable income. However, you must meet certain criteria related to your relationship with the child, financial support, residency, and income.
Although divorce or separation turns one household into two, both parents cannot claim their children as dependents when it comes to filing taxes. The IRS law states, “One taxpayer, one dependent.” This means that when divorced parents file their taxes separately, only one parent can claim their child as a dependent in a tax year,
Can You Claim the Child On Taxes with Shared Custody?
In a 50/50 custody arrangement, both parents share equal responsibility and time with their child. The child spends an equal amount of time during a year living with each parent. Both parents are also equally involved in making important decisions about the welfare of their child. However, when it comes to claiming child of taxes, the approach is not that straightforward.
The custodial parent is the one with 183 overnights or more. If you share parenting time with your spouse equally (50/50), you must have at least one more overnight than your spouse. This is naturally possible because there are an odd number of days in a year (365), which means that one parent will have one more day than the other.
Usually, one parent will have 183 overnights while the other will have 182 overnights. Automatically, this means that the one with the 183 overnights is entitled to state and federal tax deductions and exemptions. Since there are no dual-custodial parents under the IRS regulations, only one of the parents can claim the tax benefits and not both.
Can You Agree on Who Will Claim the Tax Benefit?
Getting the 183 overnights in a year may not always be possible. You may go for a long vacation or certain circumstances about the holiday parenting time may result in the other parent having more time in a year. Since you both want the best interest of your child, it is best for the parents in shared custody agree on who will claim the child on their taxes for the year.
Many parents with 50/50 custody simply divide the tax benefits and alternative years in making the claim. One parent will claim the benefits in the first year and the other in the second year. If you have multiple children, you can allocate the child credits in a way that one parent claims the same child every year while the other claims another child. If you have three children, you can allocate a child to one parent, the second to the other, and then alternate to the third child over the years.
What Tax Credits Are Available to Divorced Parents
You can qualify for several credits, benefits, and exemptions under federal and state tax laws. For divorced parents in a shared (50/50) custody, these may include:
- Child and Dependent Care Credit
- Child Tax Credit
- Earned Income Tax Credit (EITC)
- Head of Household Filing Status
- Credit for Other Dependents
- Education Credits
To make the claims, a parent must meet all other qualifications of a tax benefit. For instance, one parent must pay for childcare expenses while the other works to claim the Child and Dependent Care Credit.
Get Support from Experienced Lawyers
The decision of who claims child on taxes with 50/50 custody often raises issues concerning both federal tax laws and state domestic relationships. You need to consider the tax consequences of your decisions if you want to make things easier. Hiring an experienced lawyer will help you negotiate a parenting plan that will allocate the credits and exemptions to reduce arguments in the future. Get in touch with our attorneys at Schill Law Group to help you deal with such issues.
