Divorce is emotionally and financially stressful, especially when children are involved. A common point of confusion is which parent gets to claim the children as dependents on their tax return after a divorce. This can affect tax refunds, credits, and financial planning. Understanding the answer to this question, as well as your legal rights and options, is crucial to protect yourself and your financial future. Continue reading for more information and work with an experienced Dallas County divorce lawyer for skilled legal advice today.

What is a Dependent and Why Does it Matter in a Divorce?

A dependent is generally defined by the IRS as either a qualifying child or a qualifying relative that depends on a person for financial support, including housing, food, and clothing. Claiming a child as a dependent allows a taxpayer to potentially qualify for significant tax benefits, such as the Child Tax Credit, the Credit for Other Dependents, and the Earned Income Tax Credit. After a divorce, parents no longer file taxes jointly, so one parent can claim a child as a dependent. This right and the associated financial advantages are often a major point of contention and negotiation during Iowa divorce proceedings.

Who Gets to Claim the Children as Dependents After a Divorce in IA?

Iowa courts may address which parent gets to claim children as dependents in the divorce decree. Judges often consider custody arrangements, parenting time, and financial support when making this determination.

Generally, the custodial parent is the one who has the children for the greater number of nights during the tax year. Under IRS rules, this parent is typically entitled to claim the children as dependents, regardless of the child support agreement.

However, Iowa courts can override this rule, or the custodial parent can release this claim to the noncustodial parent by signing IRS Form 8332, the Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. The parents may negotiate alternating years for claiming the children as part of their divorce settlement, which is then incorporated into the court’s decree.

What Are the Qualifying Child Tests?

For divorced parents to claim a child as a dependent, they must generally meet five tests: the relationship, age, residency, support, and joint return tests.

  • Relationship: The child must be the parent’s child, stepchild, adopted child, foster child, or a descendant of any of those children.
  • Age: At the end of the tax year, the child must be under the age of 19 or under the age of 24 if they are a full-time student for at least 5 months. Note that the child can be any age if they are permanently disabled.
  • Residency: The child must live with you for more than half of the year.
  • Support: The child cannot have provided more than half of their own financial support during the year.
  • Joint return: The child cannot file a joint tax return for the year, unless it is only to claim a refund for income tax withheld or estimated tax paid.

Consulting with a Dallas County divorce lawyer is essential to ensure these complex tax issues are handled correctly.