Child Support & Dependency Exemptions

Who Gets To Claim The Kids After The Divorce?

It’s not uncommon for there to be some dispute about who gets to claim the children for tax purposes.  Over the years I have heard many myths about who gets to claim

what for taxes, some people think it’s automatically split equally, others say that if you pay child support you get to claim the kids every year, both of these are only partially correct.

First, let’s look at the IRS regulations.  The Internal Revenue Code 152(c)(3)(a) says that the custodial parent gets to claim the child unless the parent “affirmatively waives” their right to claim the child.  We need to look at these two issues separately.

“custodial parent” is defined as the  parent with whom the child spends the greater portion of the year with. This is actually, pretty easy to figure out, just count up the number of overnights (although the law doesn’t define overnights as being the key factor, but it’s a good start) and see who has a more time.

Next is the issue of “affirmatively waives” the right.  This is done very easily by  signing IRS form 8332, which is done on an annual basis and assigns the deduction to the other parent.

Despite what the IRS law says, as a practical matter, most cases settle with alternating depending exemptions.  This means that if there are two children, each parents gets one of them, three kids would alternate on a 2-1/1-2 split and so on.  While there is not specific law that lays this out in Minnesota, it’s very common in Southern Minnesota (and Mankato especially) to split them like this.

A unique settlement that we sometimes see is if one parent is making considerably more money than the other then the deduction is sometimes (but now always) worth more to the higher earning parent.  For example, if the higher earning parent is at the 40% tax bracket and the lower parent is at the 28% tax bracket then the 2013 exemption of $3,900 would break down like this:

• Higher-Earning parent $3,900 *.4 = $1,560 savings
• Lower-Earning Parent $3,900 *.28 = $1,092 savings

It gets even more confusing when you factor in the earned income credits and various other lower-income tax credits that the higher earning parent may not qualify for.  This is why it’s often worthwhile to run the numbers by your accountant to see what each exemption is actually worth.

For you folks who want a little more information, you can read the Minnesota Court of Appeals case Rogers v. Rogers, 622 N.W.2d 813 (Minn. 2001) which says that Minnesota Judges can assign or in effect require the other parent to sign form 8332.

BOTTOM LINE: at least be aware of this issue and raise it with your divorce lawyer before signing any tax documents.

Information obtained in mankatofamilylaw.com may contain knowledgable content about Minnesota Family Law that may be considered beneficial to some; however, in no way should this website or its contents be considered legal advice. Mr. Kohlmeyer is a Minnesota licensed Attorney and cannot provide legal services or guidance to those outside of Minnesota. If you wish to retain Mr. Kohlmeyer as your Attorney in your Family Law matter, contact 507-205-9736.