You may encounter some tricky financial issues when you share children with an ex-spouse or partner. They may include child support, pensionand who claims which deductions Or credits at tax time. Many tax breaks are designed to help parents minimize their liability, but they all come with complex rules. Knowing who can claim them and when can make tax season much easier and avoid the possibility of costly tax mistakes.

Claiming a child on taxes in the event of divorce or separation

You must first have an eligible child to be eligible for the title. addicted to take advantage of tax breaks related to children. The Internal Revenue Service (IRS) has specific rules for reporting children on your taxes as dependents. The custodial parent generally has the right to do this. This is the parent who has physical custody. The child spends more nights under his or her roof during the year than with the non-custodial parent.

The child must also meet rules for eligible children set by the IRS. They must meet four specific tests:

• Age: An eligible child must be under the age of 19, or under the age of 24 if they are a full-time student for at least five months per year. No age restrictions apply if the child is permanently and totally disabled.
• Relationship: The child must be your son, daughter, stepson, adopted child, or adopted child.
• Residence: The child must live with you for more than half the year.
• Joint statement: Your child cannot have filed a joint tax return with anyone else.

Only one person can request an eligible child if you request the earned income tax credit (EITC) and other child tax benefits. Only one of you will be able to claim a qualifying child if you are divorced or separated and file separate returns.

Claiming a child in joint custody

Deciding who arrives claim a dependent child can be evident when one parent has physical and legal custody. But what happens if you share custody equally? Deciding who gets to claim the child can be a little trickier in this case.

You could agree to alternate years by claiming the child as a dependent on your respective returns if you only have one child together. You might decide to share them between the two of you if you have several children. Parent A could claim child 1 and parent B could claim child 2.

You can include your own instructions for declaring your children as dependents in your final judgment if you are in the divorce process.

Child tax benefits for custodial parents

Custodial parents can claim several tax breaks under IRS rules. They include deductions that will reduce your taxable income for the year and credits that will reduce your tax liability dollar for dollar. You may be able to reduce what you owe in taxes for the year or increase the amount of your tax refund.

Custodial parents can apply for certain joint child tax benefits.

Child tax credit

THE child tax credit can be claimed by guardian parents for one or more dependent children. Eligibility is based on income.

The child tax credit is $2,000 per eligible dependent child, the maximum of which is available to parents earning up to $400,000 of modified adjusted gross income if married and filing jointly or $200,000 if they are single.

Earned Income Tax Credit (EITC)

The EITC is designed for low- and moderate-income households. To benefit from it, you must:

• Be able to present proof of income
• Have investment income meeting certain dollar thresholds
• Have a valid social security number
• Be a US resident
• File as single or head of household if you are a custodial parent

You generally must have one or more qualifying children to receive this credit. However, special rules exist for taxpayers who do not have eligible children. You must pay more than half of your home’s maintenance costs for the year. There are limits to the amount of income you can earn to apply for the credit, as well as limits to the credit itself.

Child and Dependent Care Credit

THE child and dependent care credit is designed to help parents recoup some of the cost of child care. To be eligible as a custodial parent, you must:

• You have one or more eligible children for whom you pay childcare costs
• Pay childcare costs to be able to work or look for work

The credit amount is based on your adjusted gross income (AGI). This ranges from 20% of your qualified expenses if your AGI is more than $43,000, to 35% if your AGI is $15,000 or less. You generally must file a joint return with your spouse to qualify, but an exception exists if you did not live together at any time during the last six months of the tax year. Other qualifying rules also apply.

Head of household declaration status

Custodial parents can claim head of household status if they meet certain conditions. Claiming this status allows you to benefit from a higher standard deduction amount.

You can claim head of household status if:

• You are considered single. Being married but separated is allowed if you have a legal agreement in place.
• You pay more than half of your home maintenance costs for the year.
• You have one or more eligible dependents living with you.

Head of household filers can claim a standard deduction of $21,900 for the 2024 tax year, increasing to $22,500 in 2025. This is higher than the standard deduction of $14,600 ($15,000 in 2025 ) allowed for single filers that year.

Consider whether claiming the standard deduction using head of household status could result in a greater tax break than itemizing your deductions if you have many deductions you can claim. You must itemize or claim the standard deduction. You can’t do both.

Child tax benefits for non-custodial parents

A noncustodial parent is generally not able to claim child tax benefits that require the child to satisfy a residency test. You will not be able to claim head of household status for a higher standard deduction, the Earned Income Tax Credit, the Child Tax Credit, or the Child and Dependent Care Credit if your child is not living with you for most of the year. .

The IRS, however, allows non-custodial parents to claim the child as a dependent for the purposes of claiming the child tax credit, if these conditions are met:

• The parents are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement or have lived apart at any time during the last six months of the year, whether they were married or not.
• The child received more than half of his child support for the year from his parents.
• The child is in the police custody of one or both parents for more than half the year.
• The noncustodial parent attaches to his or her declaration Form 8332 or a similar declaration containing the same information required by the form.

The essentials

Filing taxes as a divorced parent can be difficult to navigate depending on the agreements you made with your former spouse. Including tax considerations in your divorce judgment can help avoid communication problems, but you may need to modify the judgment if either parent’s financial situation changes. Speaking with a tax professional can help if you are unsure of what you can claim as a custodial or non-custodial parent.