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The process of claiming a child as a dependent after divorce

Following a divorce in North Carolina, a child can be claimed as a dependent by only one parent per tax year. Ideally, exes will agree ahead of time on who gets to do this. Usually, it is the custodial parent. If the custodial parent wants to give the other parent the right to claim the child, this can be done with Form 8332. However, if parents disagree about who can make this claim, there could be problems.

The IRS accepts the dependent claim from the first parent who files. In the case of a conflict, the agency uses several factors to determine which parent can claim the dependent. Usually, this is the person with whom the child lives most of the time. For exes who share custody, the IRS will usually calculate their adjusted gross income and grant the claim to the person with the highest AGI. This is based on the assumption that the parent who earns more is also contributing more to the child’s support.

Under the Tax Cuts and Jobs Act, the personal exemption was eliminated. However, the Child Tax Credit doubled to $2,000, and the Dependent Care Credit was retained. This makes claiming a dependent very valuable for some parents.

Whether or not they share child custody, some parents work out a plan in which they take turns claiming a child as a dependent. If the parents have two children, each one may claim one child. Parents might want to write this into their agreement along with guidelines to help ensure consistent rules between their households. Legal counsel could help a couple create a fair agreement.