Can Both Parents Claim Their Child on Taxes in California?
Raising kids is no small feat, and it can get even more complicated when parents live in separate households. Luckily, both the State of California and the federal government provide tax credits that help offset some of the costs. When parents file jointly, they share the benefits—but what happens when they live apart? Can both parents claim the child on their taxes? How does this work for divorced or unmarried parents? And if you’re paying child support, do you automatically get the tax benefits?
Let’s break it down. Understanding these tax issues in advance is crucial, especially when setting up a divorce settlement.
Dependent Exemptions Are Gone, but Dependent Status Still Matters
A few years back, federal tax laws changed and eliminated the tax exemption for dependents. But don’t worry! In many cases, tax credits have taken their place, which can mean real savings. To claim these credits, though, you need to list your child—or other dependents—on your tax return. It’s not just limited to children either. Siblings, grandchildren, or other relatives who lived with you for more than half the year and didn’t provide more than half of their own support can also qualify.
A Child Can Only Be Claimed on One Tax Return
Here’s where it gets tricky: child tax credits can’t be split between two parents who file separate returns. Even if you’re married but filing separately, a child can only be listed as a dependent once.
But don’t worry—parents can still share the financial benefits of those child tax credits! You’ll just need to set up an arrangement as part of your divorce settlement. Maybe one parent claims the child every other year, or perhaps one parent claims one child, and the other claims the second child. An experienced family law attorney can help you figure out a plan that works best for your situation.
The Custodial Parent Usually Claims the Tax Credits
The federal government assumes that the parent with primary custody is the one claiming the tax credits. Even if the non-custodial parent covers most of the child’s expenses, the IRS expects the parent the child lives with most of the time to claim the child as a dependent.
However, the non-custodial parent can still claim the child—if the custodial parent signs Form 8332 (Release/Revocation of Release of Claim to Exemption for Child By Custodial Parent). The non-custodial parent needs to file this signed form with their tax return and, ideally, file early. Why? If the custodial parent forgets they signed the form and claims the child first, the IRS system won’t allow the child to be claimed twice, leaving the other parent out of luck.
Work with an Attorney to Ensure Tax Benefits Are Fairly Split
Since tax credits can be claimed on both federal and California returns, they can amount to thousands of dollars each year, depending on income. It’s important to come up with a fair way to allocate these benefits between both parents, including a plan to adjust if tax laws change down the road.
An attorney can help assess the value of these tax benefits and create a plan that ensures both parents receive their fair share.
Talk to Custody Queens About Handling Taxes and Child Custody
At Custody Queens, we know there’s a lot to juggle when it comes to divorce—and taxes often get pushed to the bottom of the list. We’re here to make sure tax matters are properly addressed, so you can secure your fair share of resources both during and after your divorce.
To discuss how we can protect your interests, schedule a confidential consultation with our team today!
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