Who Claims a Child on Taxes With 50/50 Custody?

Colorado family law courts prefer a 50/50 solution for parenting time between divorcing parents. However, this may present some concerns when it comes time to file taxes, since each parent may wish to benefit from claiming the child as a dependent. A Boulder child custody lawyer from Danielsen Westhoff, PC, can help you understand who claims a child on taxes with 50/50 custody and the factors that may impact the decision.

Joint Custody Is Usually Best for Children of Divorce

Of the many types of child custody arrangements in Colorado, family court judges prefer a 50/50 arrangement whenever possible. Unless one parent can’t provide a safe and stable home, shared custody is usually good for kids. However, even with 50/50 parenting time,  there are other factors that determine which parent claims the children at tax time.

When it comes to filing taxes, the Internal Revenue Service (IRS) considers the custodial parent to be the one who has the children for at least 183 nights each year. Since 182.5 is half of 365 (the number of days in a year), 183 nights or more at one parent’s home makes them eligible to claim dependents.

Some parents have 50/50 custody but use nesting as a parenting plan, where the children remain in the family home, and the parents rotate in and out. This maintains stability for the children, but the IRS rule of 183 nights still applies.

Income Also Plays a Part

What if the parents always divide the parenting time right down the middle every year? The IRS uses its residency test to assess each parent’s income. Whichever person has the higher income has the right to claim the children as their dependent, even if they are considered non-custodial.

If the parent with more income is non-custodial, they have the option of signing the Release of Claim to Exemption for Child of Divorced or Separated Parents. This would allow the other parent to claim the children on their taxes, benefiting from the child tax credit and other assistance. For parents with similar income levels, they can choose to trade off each year.

Alternatively, if there are 2 or more children, parents with 50/50 custody may choose to each claim 1 or more children as dependents so both can receive a child tax credit. For example, the child’s age may determine custody, especially if they are very young, meaning one parent claims them as a dependent until they’re older.  If the parents can’t agree or there is too much conflict, then the IRS rules will prevail.

Navigating the Question of Claiming Your Children as Dependents for Taxes

It’s important to clearly define how you will handle financial issues after divorce. If you and your ex are not on friendly terms, it’s smart to include who will claim the children as part of your parenting plan and custody order. If you’re able to co-parent amicably, then you may decide as your circumstances change.

Here’s what we recommend:

• Communicate clearly well before tax filing time.
• Discuss the tax ramifications whenever you make any custody changes.
• Prepare documents and share them with the other parent before it’s time to file.
• Talk with a tax professional if you have any questions.
• Get help from a child custody attorney if the other parent is making things difficult.

If a parent falls behind in child support, they may still have the right to claim a child as a dependent. However, any tax refund could be used to bring their child support account up to date. For additional questions about child custody or support, contact us at Danielsen Westhoff, PC, to arrange a consultation at your convenience.