Tax Exemptions for Children

Written by: Megan Dell

For most families, having a child provides tax benefits, specifically tax exemptions for children, and these benefits can be negotiated during a child custody or divorce case.

Dependent Exemptions

Generally, according to the Internal Revenue Code, a child can be claimed as a dependent by anyone the child has lived with for more than half of the year.  This typically results in the parent who has primary physical custody being entitled to claim the tax exemption for the children. However, the Code allows for other types of dependent exemptions, as well.

However, the law – specifically S.C. Code Ann. Section 20-3-130(F) – allows the South Carolina Family Court to allocate the child exemption between the child’s parents or guardians.  The Family Court judge may decide to allow someone other than the primary custodian claim the exemption to minimize the taxes paid cumulatively.

Waiver of Tax Exemptions for Children

To claim the tax exemptions for children who have not resided with you for more than half of the year, you must have written permission from the primary custodian.  The IRS provides the “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent,” Form 8332, for this purpose.

Court Order Language regarding Tax Exemptions for Children

 It is common for couples to negotiate which parent will be permitted to claim the children as dependents and for their agreement about it to be detailed in the final order.  However, since 2008, the IRS has been unwilling to consider the terms of a Family Court order when determining whether a taxpayer properly claimed an exemption.

That means that unless your order includes specific language detailing which parent is entitled to claim the child tax exemption, as well as any process for one parent to waive the exemption and allow the other to claim it, then you may not be able to claim your children as dependents on your federal tax return.

Schedule a Consultation

To ensure you are able to properly claim exemptions for your dependents after your divorce, it is important to seek advice from an experienced Family Court lawyer. Schedule a consultation with us.