Divorce: It Takes Two to Tango


By: Alex Franch, BS EA

This is the time of year when many divorced taxpayers ask themselves, who gets to claim the children as tax deductions? When unmarried or divorced parents have children, they get to experience the intersection of Federal and State law.

Parents Who Divorce

DivorceThe State typically decides who gets to claim the kids as part of the separation agreement. In this case, State law dictates Federal treatment of the dependent on your taxes. If a divorce is amicable, one parent can opt to release the dependency to the other parent. This can be beneficial because a number of credits follow the dependency. If the entitled parent makes too much money, these credits and write-offs can be lost. By releasing the dependency to the parent with lesser income, they may end up ahead. IRS rules dictate the available filing statuses that the parents can use.

Okay, so let’s say the divorce is not official. What happens then?

Separated Parents – Non-divorce

If you still live together and there is no separation agreement, legally you are not separated – you are just having a bad fight. If you actually separate, the dependency follows IRS rules of relationship, residency, and income to break the tie between two parents. Once again, IRS rules dictate the available filing statuses that the parents can use.

Shacking up

If a taxpayer is living with his or her significant other and they have a child together, the parent with the higher income is typically be entitled to the Head of Household filing status, as well as the dependency. The parents have to have joint custody of the child as dictated by State law. Once again, there exists the option to release the (Federal law) tax exemption if this is beneficial. Additionally, if one of the parents stays home or makes very little income, the taxpayer might be able to claim his or her partner as a dependent as well.

The Wisdom of King Solomon

What happens when parents can’t agree? The parent who files and claims the child first will have their tax return accepted by the IRS. The parent who files second will have their e-file rejected and they will have to paper file. If the first parent was not entitled to claim the dependent, he will have to amend his tax return after it was filed. If the parents cannot work it out, both parents will then receive a notice from the IRS with a checklist of information so that they can make a decision for you. Divorce or separation of any kind can be difficult. Read the follow the State and IRS rules to make it a little less.

Wondering how your household qualifies?

Maybe you went through a recent divorce, separation or you are in a relationship with a partner. Do you have thoughts, questions or concerns regarding how your household qualifies for tax filing? WorthTax has ultra convenient services. Feel free to contact us, leave your comments below or post to on our FacebookGoogle+ or LinkedIn pages.

Maybe you know someone who can benefit from this information, feel free to share:
Linkedin - Joseph Cahill / WorthTaxTwitter - Joseph Cahill / WorthTax / WorthTaxPrepFacebook - Joseph Cahill / WorthTaxGoogle+ - Joseph Cahill / WorthTaxalignable_logo - Joseph Cahill / WorthTax


Tax Season is Here!

Time flies – before it slips away, call Alex Franch, EA at 781-849-7200 for your appointment and learn about our client discounts here.

– – – – – – – – – –

photo credit: Microsoft

For more information, call Alex Franch at 781.789.7200. WorthTax has locations in Norwell, Dedham, and Weymouth, Massachussetts.
Alex Franch

Mr. Franch is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Mr. Franch is an Enrolled Agent and has eight years of tax preparation experience. He has been serving individuals, families, and businesses for several years with tax and financial planning strategies and is a junior partner with the firm. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA) with a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance.

Leave a Comment