Legal Question in Tax Law in Indiana

Divorce & Child Tax Credit

First of all during my divorce I had an attorney who neglected my case. Short of that everything was done via fax & upon conclusion of the divorce I discovered that my ex gets to take our daughter evey year as a dependent as long as his support is current. I understood the paper as saying evey other year but that is not the case. My 1st question is if there is anything that I can do to have this modified and then my next question is what does him taking her as a dependent mean to me? Things such as me filing head of household, EIC, dependent care.


Asked on 1/22/02, 2:42 pm

2 Answers from Attorneys

John Cook Dunn & Cook

Re: Divorce & Child Tax Credit

First of all, the IRS does not get involved in domestic disputes over which parent gets the exemption for the children. The IRS will only look at two things (for divorces after 1984)- whoever has custody gets to take the exemption unless the custodial parent executes a Form 8332 or equivalent allowing the other parent to take the exemption.

You indicate that "some" paper suggests that you and your ex will share the exemptions every other year, but that is not the case. What do you mean by this? The key document is the final divorce decree - what does it say. If it says that your ex gets the exemption every year as long as he is current in child support, then you would be in violation of the divorce court's order if you went ahead and claimed the exemption. Note, I said the divorce court's order, not the IRS.

Your husband's claiming the exemption does not preclude you from filing as head of household or taking child care credit. It does affect you taking the personal exemption for the child as well as the child tax credit.

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Answered on 1/22/02, 3:45 pm
Mary Ann Wunder Wunder & Wunder

Re: Divorce & Child Tax Credit

The tax dependency deduction is frequently given to the non-custodial parent as a sop, because he (or she) gets no benefits whatsoever from being a single parent paying child support. Over time in practice (some 20 years), I have not seen that it has a significant effect on the tax obligation for either parent at the end of a tax year, particularly for those custodial parents who are eligible for both claiming the head of household status and an earned income status. It seems to be more of an issue for custodial parents who are remarried and more likely to be in a much higher tax bracket.

Regardless of the "neglect" by your attorney, if he presented to you a proposed settlement agreement that you did not understand, you should not have signed it until he explained it to you. If it was changed after you made an agreement and signed it, then you should get a petition on file with the court as soon as possible to set it aside as not being the document you thought you signed.

Any provision of your decree relating to the child (support, custody, visitation, medical expenses, college, insurance and tax deductions for example) can be modified upon petition and proof that there has been a substantial change of circumstances. As a rule of thumb, most judges don't want to see you back for a modification until at least a year has elapsed since the entry of the decree or the prior modification (although most judges will ignore this rule if there is an emergency such as loss of employment).

Tax dependency deductions are allowed by the federal tax law but when a divorcing couple makes an agreement with respect to the division of the deduction for a child, the state court (the divorce court) can enforce such agreement, even though the tax law would determine that the non-custodial parent cannot claim a child.

Your decree provides that the non-custodial parent be "current" in support in order to be entitled to claim the child. This means that you need to keep track of the amount of money he is supposed to pay during the calendar year as well as the amount he actually pays in order to make a determination of whether he is entitled to the deduction (and hence to force you to sign the tax form he needs to claim the child).

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Answered on 1/22/02, 9:39 pm

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