Having children can bring many little joys into your life: chubby-cheeked smiles, memories of a first special holiday, a quick “I love you!” as they dash out the door to catch the bus. But let’s face it, having kids can also give you some serious tax benefits. Naturally this benefit is not going to be something highlighted in a greeting card, but when you are going through a divorce, deciding how to handle this benefit is important.
According to the IRS, if you and your child’s other parent are not married, only one of you can claim the child on their taxes. Typically, the “custodial” parent is the one who may claim the child. The “custodial” parent is defined as the parent “with whom the child lived for a greater number of nights during the year.” That is why, when deciding on a parenting time schedule, you will often find people fighting over how many “overnights” they get with a child. The person with more “time” will usually be considered by the IRS to be the “custodial” parent, regardless of whether you actually have shared parenting or not.
Now, hopefully we do not have to tell you that it is less-than-desirable to only want more time with your kid because that means you get a tax benefit. The IRS seems to understand this moral point as well, because they do give parents another option: if you have shared parenting and thus have two “custodial” parents, then you can alternate years in which you and the other parent can claim the child on your taxes. For example, you could agree that the other parent will be entitled to the tax exemption in even years with you being entitled to the exemption in odd years. Courts all across Ohio, including Franklin County and Delaware County, like to see as equitable of an agreement as possible between parents, which includes things like an equal enjoyment of the child tax credit.
In order to make this alternate-enjoyment arrangement work, the parent who is not claiming the child will need to “sign a written declaration or Form 8332…for the noncustodial parent to submit with on their own.” Your parenting plan should include language that holds the parent not claiming the exemption accountable for executing these documents. It should also include language laying out which parent may claim the child (or children) in which year. If you have more than one child, it may be to your benefit to talk with your attorney about the most advantageous way to alternate claiming the children.
It is important to remember, though, that no matter how well-written a divorce decree or parenting plan is written, enforcement is going to be up to the Court that granted the divorce or approved the parenting plan as an Order. The IRS is not going to give credence to your Parenting Plan in the event that the other parent fails to sign the necessary documents or claims the child during the year where you were supposed to claim the child. Should your child’s other parent fail to follow the terms of your Court Order, you will need to bring that to the attention of that Court and follow their process of enforcement.
To find out how to do that and to find out what other key pieces of language you will need in a parenting plan, make sure to reach out to an experienced family law attorney. No person will ever be a better parent to your children than you, but it helps to have someone in your corner when going through something like a divorce or custody action. An experienced family law lawyer will make sure that not only are you protected but that your children are centered throughout the process. It is important that your attorney share your concerns about the welfare of your children and take them as seriously as you do. If you think you may need an attorney, please fill out the questionnaire on our website and our paralegal will reach out to you to set up a free consultation with one of our attorneys.
Our attorneys are well-versed in not only the intricate language sometimes needed to craft a parenting agreement, but are also familiar with all the tax implications that go along with drafting a well-written shared parenting plan. Having practiced all over the state of Ohio, our legal team knows not only what the IRS expects but what Courts from Franklin, Delaware, Cuyahoga, Knox, and even Summit Counties expect to see in their parenting plans, which makes your life that much easier.
Good luck and remember – chubby cheeks and happy memories with your kids will last far longer than any court battle. It gets better, especially if you hire a good attorney.
-Lucy Shane, Esq.