Who gets to claim children as tax exemptions after a divorce?

On Behalf of | Jul 20, 2019 | Family Law

One of the financial benefits of having children is the ability to claim them on federal and Arizona state tax returns. The child tax credit can be a boon for parents looking to pay less in income taxes. When divorce happens, a common question asked is who gets to claim the kids on taxes?

AZ Law Help list two options for determining who gets to file their taxes with their kids as dependents. The parents can come to an agreement amicably settling the issue and determine who gets the tax dependency exemption. The state of Arizona does not have any requirements. For disagreeing parties, there is a formula used based on adjusted gross income proportions with four years in a row as the maximum allowed for one parent to claim the exemption.

The Arizona Department of Revenue states that the year of divorce community income and property are jointly split. The income only applies before the split not after. Separate income stays separate in most cases. The person allowed to take the child dependency exemption starts the year of the divorce. Ideally, the parties have reached an agreement on who gets to take the exemption well before taxes are due.

Waiting until tax time to have a decision can be stressful for both parties. A family law attorney can provide additional information on the state guidelines. In general, the agreement for the state income taxes can move over and apply for federal income taxes as well. Mediation may be another way to reach an agreement before referring to the Guidelines formula.