When children are involved in a divorce or when the parents were never married in the first place, one parent is usually required to pay child support to the other to help financially provide for the children. Florida wants to ensure that in these cases, children have their needs met and child support is meant to ensure this. When it comes time to file taxes, many parents have questions. A common question is which parent may claim the children as dependents.
Child support is not taxable. The parent receiving child support does not have to report it on their taxes, and the parent paying child support does not get a deduction on their taxes. Therefore, even though a parent is paying child support, his or her taxable income is not affected.
When there is one child and the parents are not together, another issue is which parent can claim the child. The Child Tax Credit can greatly help out one parent, but who gets to take this credit? Under no circumstances can both parents claim the one child. If they do, they are going to find themselves having to answer to the IRS, and may be found to have committed tax fraud. Instead, if the Final Judgment does not address this issue, the parents have to decide who should claim the child on their taxes. In most cases, the parent the child spends the majority of his/her time with should claim the child. Generally, parents choose to alternate years for claiming the child.
There are also times in which one parent may have the tax credit; for example, if the parent furnished over 50% of the child’s support. In this situation, and others, IRS Form 8332 (Release of Claim to Exemption for Child of Divorced or Separated Parents) is signed by the other parent and filed with the tax return. Without this form, the parent claiming the child will have to prove that he or she provided more than 50% of the support for the child. This is an issue parents need to discuss to avoid problems with the IRS.
For those parents who are having a difficult time dealing with filing taxes after divorce, or when dealing with alimony or child support, Wendy Norman is here to help. She has been practicing in family law for several years in the Florida area, and she can help you as well. Just give her a call at 904-306-9926.