Child Tax Credit and Support Cases

A common question for separated or divorced parents is, “Which parent gets to claim the minor child as a dependent and get the benefit of the child tax credit?” The IRS’ default rule, unless the parties agree otherwise or unless there is a court order to the contrary, is that the parent who enjoys primary physical custody (defined as the majority of overnights with the minor child during a calendar year) is able to claim the minor child as their dependent for that tax year.

If the parties have a support case through Domestic Relations, then the child tax credit will be included in the order as income to the party who will receive it, which will affect the support calculations.

In cases where the parties share 50/50 custody, many parents voluntarily elect to alternate claiming the child as a dependent, such that one party will claim the child in even years and the other party will claim the child in odd years. If the parents cannot come to an agreement on claiming the child as a dependent on their tax returns, the parent with the higher annual income will be the parent who is eligible to claim the child.

In cases where one of the parties would not get the full benefit of claiming the child due to their income, the parties may wish to allow the party who would get the full benefit of claiming the child to claim the child every year. For example, a party with no income might forego claiming the child because the child tax credit is not fully refundable, and they would not receive the full amount due to their lack of income.  The custodial parent can complete IRS Form 8832 “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent” to allow the non-custodial parent with the higher income to tax the tax credit.

If you are interested in learning more about the child tax credit and support cases, contact Tanner Law Offices at (717) 731-8114 to schedule a consultation with one of our attorneys.