When you and your spouse divorce, one of the issues that will be debated is child custody. Apart from determining who will have physical custody of the child, there is another case that you must discuss with your ex-spouse, which is who has the right to claim the child on taxes. If you and your spouse have equal custody, you will want to know who can claim the child on a 50/50 custody. To provide guidance in determining who has the right to claim the child as a dependent, the Internal Revenue Service (IRS) has established decisive rules for such situations. Of course, these rules will be able to help you. Well, in this article, we will learn the IRS’s rules to find out who can claim a child on taxes with 50-50 custody.
Claiming a Child as a Dependent
Parents usually list their children as dependents when seeking tax deductions each year. However, when a divorce occurs, the tax law sets out clearly how this will change for either of you. If you have a child that you want to claim as a dependent for tax purposes or tax deductions each year, make sure the child meets the IRS qualification test. It is worth noting that this federal tax law test will apply to your own children or relatives you wish to claim.
If you have physical custody of the child, you can claim the child as a dependent if any of the following criteria are met:
-
- The child is younger than you and is also under 19 years old, or
- The child is under 24 years old and a student.
But this age limit does not apply to a child who is considered disabled, whether temporarily or permanently. We highly suggest you seek legal advice from an experienced custody lawyer for more guidance on this type of situation.
Can Both Parents Claim a Child as a Dependent on Taxes?
Both parents cannot claim a child on their taxes. Even if you and your ex-spouse have a 50/50 child custody arrangement, legally, only one of you can claim the child as a dependent on taxes. This may seem unfair. However, this is the reality. To avoid problems later, it is important for you and your ex-spouse to understand which of you can claim the child as a dependent on taxes. Actually, the the Internal Revenue Service (IRS) will not overlook the error if you and your ex-spouse do end up claiming the child as a dependent on the same-year tax returns. But you must remember that you and your ex-spouse will find a complicated situation and may even bring penalties. So, it is very important to discuss and determine who can claim your child on taxes with 50/50 child custody.
Who Can Claim the Child on Taxes with 50/50 Child Custody?
Under federal tax law, the one who claims a child as dependent is parent who qualifies as the custodial parent. The Internal Revenue Service (IRS) explains that generally the parent who has custody is the parent who lives with the child for a longer period of time during the year. If you have 50/50 custody, filing taxes could possibly be a source of contention, and most likely require a legal resolution as to who can claim the child as a dependent. For this case, the Internal Revenue Service (IRS) implements a tiebreaker rule. This tiebreaker rule states that the parent with majority custody of the child will be able to claim a child on taxes.
It should be noted that the parent who has custody is the parent with 183 or more parenting time. When you and your ex-spouse have 50/50 parenting time, one of you will have one more parenting time because the number of days in a year is an odd, 365 days. That means, one parent will have 183 days parenting time and the other parent will have 182 days parenting time. For instance, if you have 183 days of parenting time, then you can claim your child on taxes. Essentially, anyone who has physical custody of the child for 183 days will be considered the custodial parent. A parent who does not have custody cannot retain any right to claim it in the tax return. Under the Internal Revenue Service’s regulations, there is no such thing as dual-custodial parents when you and ex-spouse have equal or joint custody (50/50).
By the way, what if you and your ex-spouse spend equal time with the child? In the rare case, where the child spends equal time with each parent, 182.5 days per calendar year, then the Internal Revenue Service (IRS) will apply a second tiebreaker rule. In this second tiebreaker rule, the Internal Revenue Service (IRS) will give priority to the parent who has the higher adjusted gross income. That means, the parent with the higher adjusted gross income will be considered the custodial parent for tax purposes. However, the parent who can claim the child as a dependent will be able to change in alternate years. If your incomes increase and rise above the other parent, then the ability to claim a child on taxes will be switched.
Can Parents Choose Who Claims a Child on Taxes?
If you and your ex-spouse have 50/50 child custody, leaving the decision to a government agency on who can claim the child as a dependent on taxes may not be pleasant for either you or your ex-spouse. There is one way to avoid the Internal Revenue Service (IRS) applying the tiebreaker rule regarding who can claim the child as a dependent on taxes. In this case, parents in a separate custody agreement can choose who can claim the child in their taxes. So, we can say that parents can choose who claims their child on their taxes. Are you interested in taking this option? It depends on you and your ex-spouse to determine whether you will leave a decision to a government agency to find out who can claim the child as a dependent on taxes, or you and your ex-spouse will make the decision by yourselves.
Waiving the Right to Claim a Child on Taxes
If the parent with custody decides to allow the non-custodial parent to claim the child as a dependent on taxes, then they must file a form 8332 or a custodial parent dependent release form. For instance, if you are a custodial parent and want to allow your ex-spouse to claim a child on taxes, you can file a form 8332. With this form, you can release your claim to the exemption and transfer it to the other parent which is a non-custodial parent. Once you have already completed and signed the form, then the parent who claims the child needs to attach the 8332 form to their tax return as proof that they have the right to claim a child as the dependent on the taxes.
Conclusion
We can conclude that a parent who can claim a child on taxes is a parent who lives with the child for a longer period of time during the year. The Internal Revenue Service (IRS) will apply a tiebreaker rule to determine who claims a child on taxes. The tiebreaker rule states that the parent with majority custody of the child will be able to claim. In the rare case, there is a situation where the child spends equal time with each parent, 182.5 days per calendar year. If this occurs, the Internal Revenue Service (IRS) will apply a second tiebreaker rule. Under this second tiebreaker rule, the Internal Revenue Service (IRS) gives priority to the parent who has the higher adjusted gross income. It means that the parent with the higher adjusted gross income will be considered the custodial parent for tax purposes. But remember that the parent who can claim the child as a dependent on taxes may change in alternate years. The ability to claim a child on taxes will be switched when one parent’s incomes increase and rise above the other parent.
