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Who Gets The Exemption?

We're in the midst of tax season and the question on everyone's mind is who is claiming the kids? If you're in the middle of a divorce and were therefore married in 2015- the answer is probably both of you. Absent an agreement or court order to the contrary, you will most likely be required to file taxes jointly and share in any refund.

However, as part of your divorce negotiations, who will claim the dependency exemption must be discussed and included in any final agreement. In Indiana, the most common practice and most common court order is for parents to share claiming the children on their taxes. The ordinary scenario with two kids- that's easy. Each parent claims one. One child? Alternate the year in which the parent claims the child.

This "typical" arrangement is not absolute. A typical condition on the right of a parent to claim the exemption is that the non-custodial parent must actually be paying support. Most court orders or agreements will include a requirement that the non-custodial parent (or parent saying support) be at least 95% current on his child support obligation for that year. If this is a condition of your tax dependency, then support payors should call the child support clerk’s office for an account history for verification of compliance. And if support is current, then the custodial parent must sign the necessary forms to allow the non-custodial parent to take the exemption.

If support is not current, then the non-custodial parent forfeits his right to make the deduction this year. Claiming the child when support is not current (if that's a condition of the exemption) or it’s not your year to do so isn’t as simple a fix as “make-up time” or a reimbursement. It can be an expensive process resulting in a finding of contempt, which could result in an award of attorney fees. Claiming a child who was not yours to claim – while it can provide a short term windfall – can end up costing a lot more money in the end.

Taking the time to consult with an accountant or a lawyer to ensure that you're entitled to claim your child(ren) as exemptions before you file is important!

At the center

Beckman Lawson, LLP
201 West Wayne Street
Fort Wayne, IN 46802

Phone: 260-422-0800
Fax: 260-420-1013