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What do you need to know about child support when filing taxes?

On Behalf of | Oct 17, 2022 | Custody and Parenting Time |

Child support battles in Wisconsin often create complex financial struggles. When you prepare your taxes, these financial struggles often become even more apparent. Keep these child custody guidelines in mind when filing taxes.

Only one person may claim the child as a dependent

Parents who share joint child custody often wonder if both parties may claim the child on their tax returns. However, even if you share custody on a 50-50 basis, only one parent may claim the child as a dependent on their taxes.

Custodial parents typically claim the child as a dependent

If the courts assign a custodial parent and a non-custodial parent, the right to claim a child as a dependent typically goes to the custodial parent. While non-custodial parents may claim children as dependents with the permission of the child’s custodial parent, doing so greatly increases the chances of an IRS audit.

Tiebreaker rules apply to joint custody cases

The IRS typically grants the right to claim a child as a dependent to the parent who has the child most often throughout the year. However, in joint custody cases, you may face difficulty determining who spent the most time with the child. In these cases, tiebreaker rules state that the parent with the highest adjusted gross income may claim the child as a dependent.

Dependent claims allow for other credits

If the child custody arrangements allow a parent to claim the child as a dependent, that parent can also claim the following credits:

• Child tax credits

• Educational expenses

• Credits related to other dependents

Failure to follow child custody tax laws can the processing of your taxes

Parents often expect significant tax refunds. But if the IRS notices any inconsistencies in your tax returns, your returns may be delayed. Always make sure you are complying with the law before you file your taxes.