Raising a child is extremely expensive. Because of that, parents often get tax benefits by claiming their child as a dependent in their taxes.
However, both parties cannot claim the child as a dependent on their separate taxes after divorce. So how can divorced couples handle the situation?
In shared custody situations
Yahoo! Finance discusses who can claim the child on taxes after a divorce. In situations where both parents co-parent together, a division of tax benefits may occur. For example, one parent may claim the child one year, and the other parent may claim them the following year.
Having an even number of children also means it is possible to divide them and claim the same children each year instead.
Divorced parents need to keep an eye on the law, though, because rules surrounding how to claim a child as a dependent change somewhat frequently.
In primary custody situations
The parent with primary custody has the right to claim their child as a dependent in their taxes. However, it is also possible for them to transfer this right to their co-parent.
To do this, the divorce must have occurred at least six months prior to the request. The child has to stay with one or both parents for at least half a year. On top of that, one parent must provide over half of the child’s financial support.
Of course, differences exist in each situation, too. This is why it is important to discuss all options before making a decision.
