Parents who share in the decision-making as well as in the financial and physical upbringing of their children have joint legal custody. Custody arrangements are agreed upon by the parents or decided by the court. Although a divorce decree or parenting arrangement might stipulate which parent may claim the child on his income taxes, the IRS has strict rules regarding tax filing for dependents, regardless of custody.
The Internal Revenue Service allows two types of exemptions on personal tax returns: "personal exemptions for yourself and your spouse, and exemptions for dependents." Exemptions for dependents are known as "dependency exemptions" and are allowed in circumstances where the taxpayer may claim a person other than herself on her tax return. A dependent is usually a qualifying child or other relative.
Although parents with joint legal custody share in their child's expenses throughout the year, only one parent may claim the child as a dependent on his taxes. According to the IRS, "a child of divorced or separated parents is the qualifying child of the custodial parent." The custodial parent is considered the parent in which the child spends the most number of nights throughout the year. This parent has the right to claim the child as a dependent on his or her tax return. If the child lived with both parents an equal number of nights, "the parent with the higher adjusted gross income" has tax filing rights according to IRS rules.
In some cases, the non-custodial parent may claim the child as a dependent. The non-custodial parent must attach IRS Form 8332 to her return, which states that the custodial parent will not be claiming the child for the current tax year. In addition, the child must have been in the custody of the non-custodial parent as least half the time, as well as received half his support from the parent throughout the year.
Federal laws and IRS rules supersede a legal custody arrangement. This means that even if a custody or parenting agreement says that each parent will take turns claiming their child as a dependent, the custodial parent still has the right to claim the child. The only exception is when the custodial parent releases his right to claim the child. Parents who agree to alternate claiming their child as a dependent must follow IRS rules and include Form 8332 with the non-custodial parent's tax return.
The IRS established rules for claiming exemptions for dependent children so that divorced, separated or unmarried parents do not claim the same child on separate tax returns during the same year. The IRS cross-references the social security numbers of dependents to ensure they are only claimed once for the current tax year.
- IRS.gov: Publication 501:
- FindLaw: Child Custody and Taxes
- IRS. “Publication 5307, Tax Reform Basics for Individuals and Families.” Pages 1, 4, 7. Accessed Oct. 21, 2020.
- IRS. “Qualifying Child of More Than One Person.” Accessed Oct. 21, 2020.
- IRS. "2019 Publication 501: Dependents, Standard Deduction, and Filing Information." Page 16. Accessed Oct. 21, 2020.
- IRS. "Understanding Your CP87C Notice." Accessed Oct. 21, 2020.
Sherrie Scott is a freelance writer in Las Vegas with articles appearing on various websites. She studied political science at Arizona State University and her education has inspired her to write with integrity and seek precision in all that she does.