Tennessee Divorce and Taxes: Can Both Parents Claim the Kids as Dependents?

It is hard to anticipate every twist and turn or issue that can arise while settling a divorce agreement, particularly when minor children are involved. One of the thorny issues that often goes overlooked until you are facing it is the question of who gets to claim the minor children as a dependent on their taxes. After all, in most circumstances both parents will contribute to the child’s care and maintenance throughout the year – don’t both parents have a case for being deserving of claiming the tax benefits meant to mitigate some of those costs?

Tennessee Law

Tax law is one of those areas that each state has developed separately. This means that what is true for parents in Tennessee and what will apply in any divorce settlement or parenting plan agreement for Tennessee families will not necessarily be the same rules that apply to parents divorcing in a different state. This means it is important to understand the specifics of Tennessee tax law, and it is wise to work with an experienced Tennessee attorney so you can understand how the law will apply in your own set of circumstances.

The general guideline is that a parent who is receiving child support is the parent who can claim the child as a dependent on their taxes. This is true even if the parent who is paying child support is the one bearing the expense of the vast majority of the child’s maintenance and care.

That is not to say, however, that there is no way for parents to share the tax benefits over time. Unless a court order says otherwise, parents are free to craft another agreement that addresses a plan for who claims the child as a dependent on taxes.

Federal Law

The federal government and their financial tax arm the IRS says that parents may not split the dependency tax credits for a child in any one year. This is true whether the parents are divorced, separated, or married and simply filing taxes separately. The fact remains: a minor child may only be claimed once per year, on one set of tax forms.

The IRS will automatically default to considering the child as the qualifying dependent of their custodial parent, which is the parent the child lived with for most the year.

Again, that is not to say there are no workarounds and things that parents can do to enable a more equal division of receiving this tax benefit. An experienced family law attorney can help.

Finding Solutions

Non-custodial parents may claim their child as a dependent during a given tax year when the parents are separated or divorced, if certain conditions are met.  The proper official forms must be submitted with the parents’ tax returns in order for the designated parent to either release/claim their right to the tax benefit.

Whatever parents decide, taxes should be something seriously considered and planned for as divorcing or separating parents go to craft and negotiate a divorce settlement agreement and/or parenting plan. The divorce settlement/parenting plan should specifically state who gets to claim the dependency benefit for each child each tax year.

Contact Fort, Holloway & Rogers

The attorneys at Fort, Holloway & Rogers can support you as you learn about your options. As experienced Franklin family law attorneys, our team can help you to negotiate and craft an enforceable agreement about how tax benefits are to be distributed, and how to settle all other issues pertaining to custody and support in your divorce or legal separation. Contact our office to begin discussing the specifics of your case with our dedicated team.

Sources:

irs.gov/faqs/filing-requirements-status-dependents/dependents#:~:text=No%2C%20an%20individual%20may%20be,child%20of%20the%20custodial%20parent.

irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules