Tax season is a miserable time of year for anyone. It seems like the tax code is continuously changing, and changes over the past few years especially have been jarring for many filers—myself included.
The good news is that tax season has officially been extended this year due to Coronavirus, giving people a little more time to figure out their filing.
One of the most complicated things about tax season for single parents is figuring out who claims the kids. If you’re a single parent with no ex in the picture, it’s a little easier. But for those of us who share custody, pay child support or have a parenting agreement in place, tax season can be a time of contention. Who claims the kids?
Custodial vs. non-custodial parents
From a basic standpoint, the parent who spends the majority of the year with the child is the custodial parent—and the person who gets to claim them as a dependent on their tax return. However, non-custodial parents can claim their child as a dependent if they provided half of the total child support. Non-custodial parents can also claim their child as a dependent if the custodial parent signs a notarized waiver saying they won’t file with a dependent.
So, what does this all mean for parents? Well, it means there’s hierarchy and priority to consider. If you spend most of the year with your kids, plan on claiming them, since you’re the custodial parent. On the other hand, if you have a good relationship with your ex and the tax benefit might be greater for them to claim the child as a dependent, that might be the route you choose to take. If you’ve got shared custody that’s close to 50/50 and can’t decide who claims, you might try an every-other-year situation.
The bottom line is that parents need to work out who’s claiming their kids as dependents. It’s good to talk with whomever does your taxes to see if they have input, and to look at your filing status to see what the implications are.
What happens if both parents claim?
If you and your ex can’t come to terms and you both claim your child as a dependent, you’re going to run into trouble. Firstly, the IRS will only recognize them as a dependent on the first tax return filed. If you or your ex submit your taxes after, they’re likely to get rejected or adjusted to remove the dependent, since they were already claimed.
Come to terms in an amicable way
Claiming a dependent is a “one or the other” situation that can cause quite a bit of contention between parents. Tax season is already stressful enough! Try to open a dialogue with your ex to figure out who’s claiming, before the tax deadline approaches. Here’s a simple hierarchy you can use to figure out who should claim the dependent:
- Custodial parent
- Non-custodial parent paying 50%+ child support
- Non-custodial parent with a lower tax burden
- Parent with the highest adjusted gross income
- Every-other-year trade-off in claims