Claiming Children as Exemptions After a Divorce

Going through a divorce is difficult and trying even in the best circumstances. The last thing that anyone would want to think about is taxes. However, taxes are important. If children are involved, it is very important to settle the issue of who gets the exemptions for the children on their taxes.

At the Wright Services, we have seen several situations where couples who are still in the middle of divorce proceedings are ordered by the judge to file "married, filing jointly" on their tax returns, until the divorce is final. This works, but both parties have to work together to get the taxes completed in a timely manner.

Some situations involve where the couple clearly defines who gets the exemption(s). Some examples of this would be one party gets the deduction "every year" without fail, one party would get the deduction one year and the other party the next year, and so on or in cases where there are multiple children, one party would get the exemption for one child and the other would get the exemption for the other child. These are just a few of the most common examples. In the previously discussed scenarios the individual receiving the exemption (if single), would be eligible to file with a status of “head of household”.

This last example is really the ideal situation, especially if you feel that the other party is not entirely responsible in getting information timely, if one party in particular is paying the majority of the expenses for the child, or if one party has sketchy or suspicious financial data. This scenario also allows the party with the child exemptions to be able to file as "head of household". However, if both parties file as "head of household" and claim the same child(ren), then one party if not both parties will end up filing amended tax returns. For this reason, it is important to establish who gets the exemptions up front.

Finally, the KEY is to make sure that whatever the exemption ruling for your situation is clearly spelled out in your final divorce decree.

(This information is on page one of form 1040 and 1040x. Form 8332 may apply depending upon your situation)