Texas parents who are divorced or separated can claim their kids as dependents on tax returns. This can lead to several valuable tax benefits, such as the Earned Income Tax Credit, the Child Tax Credit and the Child and the Dependent Care Tax Credit. However, if more than one person claims the same dependent on their tax returns, complications can arise and the Internal Revenue Service will have to decide who can claim the dependents.
There are a series of rules that the IRS will use to determine which claim to accept if dependents are claimed by different taxpayers. The rules that are used consider a number of different factors. For starters, the IRS will consider the taxpayer’s relationships with the dependent. Claims of a parent will be prioritized over the claims of any non-parents.
If the dispute is between two biological parents, the dependent’s residence during the tax year may be examined. The claim of the person with whom the dependent lived the longest will usually be honored. If a divorce has occurred, this will typically be the custodial parent. If there is equal or joint custody, the court will generally favor the parent with the highest income. To help prevent major conflict, parents could decide who gets to claim which dependents in the divorce agreement.
A divorce attorney can help a client negotiate a favorable terms that allow them to claim their children as dependents on tax returns. Depending on the circumstances of the case, litigation may be used to resolve disputes regarding other divorce legal matters, such as child support.