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Law Offices of John A. Guthrie - Family Law Attorney

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Income tax exemptions and child custody in California divorce

In many areas of law, tax issues may be of concern. During a divorce, a family law attorney may help a person to understand the tax implications of assets in resolving property division issues. A tax liability on one asset as compared to another, such as the cost-basis of a stock, may be important in assessing marital property. In divorces with children, tax issues may be negotiated in some cases.

With the income tax deadline looming, the issue of who may claim a child as a dependent after a divorce may be on the minds of some Bay Area parents. The IRS says that the custodial parent is generally entitled to claim a child for purposes of the dependency exemption on income tax forms. But, the IRS rule arises under federal law, not California family law. Notably, divorcing parents may agree to modify the general IRS rule in some ways.

A custodial parent for the purposes of income taxes is the parent with whom the child lives with for the greater part of the year. Essentially, the rule involves a calculation of how many nights the child spends in a home.

However, parents may agree in a divorce to modify that rule. A non-custodial parent may claim the child, if the parents each agree and put the agreement into the divorce. Some parents choose to alternate years for the purposes of the exemption, with one parent taking even years and the other taking odd years. Other arrangements may be possible.

It is important to note that the exemption rule does not apply to child support payments. The IRS says that a parent who has paid child support cannot deduct the payments from income. Similarly, the parent receiving child support does not pay taxes, as support is not recognized as taxable income, according to the IRS.

Source: The Huffington Post, “Children of Divorce: Who Gets the Tax Exemption?” Stann Givens, March 13, 2014

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