Spring is here. The sun is shining brighter, the days are longer and the birds are chirping. Along with the more pleasant aspects associated with the warmer weather, however, comes the inevitability of tax season. With the April 15 tax deadline quickly approaching, divorced or legally separated Tennessee parents need to know how to handle child-related tax matters.
Trying to sort out if or what you're allowed to claim on your taxes as a divorced parent can be very confusing. Much is determined by your child custody arrangement and whether or not you are the main custodial parent. In order to quality as a custodial parent, your child must live with you the majority of the time. The other parent is thereby designated as the noncustodial parent.
So how do these parental designations effect your tax situation? Custodial parents can claim their child or children as dependents allowing for the standard deduction. Additionally, custodial parents can claim the following:
•· Child care tax credit: Based on the custodial parent's income, credit amounts range from $600 to $2,100 depending on the number of children.
•· Head of household: Custodial parents, who chose to file as head of household, are typically allowed a larger standard deduction.
•· Earned income tax credit: Based on income, the custodial parent can claim from $3,169 to $5,891 depending on how many children they have.
Custodial parents with questions on what they can claim and how to go about doing so may want to seek the assistance of a family law attorney who can help answer questions related to tax credits and exemptions.
In our next post, we'll further examine the issue of divorced parents and taxes by looking at options available for noncustodial parents.
Source: SmartMoney, "Child-Related Tax Breaks After Divorce," Bill Bischoff, Mar. 28, 2012
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