My Kids Live with Me Most of the Time and My Ex Pays Child Support. Do I Get to Claim Them for Taxes?

Yes and No. One common issue that can arise in any Denver child support case, whether tied into a divorce or custody matters is the issue of claiming the children for tax purposes. The common assumption of most people is that because the kids live the majority of the time with one parent, that parent automatically gets to claim the children each year on his or her tax return. This common presumption is, part wrong, and is a misconception even held and propagated by some Certified Public Accountants.

Under Internal Revenue Service (IRS Code), if a parent has a child residing with him or her for more than half of the year, then he or she is entitled to claim the child for Head of Household purposes. This designation can also affect who gets to claim child care expenses and items of that nature. Thus, in situations in which one parent has the kids the majority of the time and the other gets certain visitation, the majority parent will get the Head of Household benefit.

However, the other significant benefit or exemption dealt with in Colorado family law cases is the income tax dependency exemption which can be claimed for a child. The misconceptions which arise center around the right to claim this exemption, with the mistaken belief being that the majority parent automatically gets the exemption. Pursuant to Colorado Revised Statutes, 14-1-115(12), the right to claim the child, or children, for income tax dependency exemption purposes shall be allocated between the parties proportionate to their contributions to cost of raising the children. What this basically translates to in the courtroom or negotiation setting is that the right to claim the income tax dependency exemption is going to be allocated proportionate to income. Thus, if the Wife makes $100,000 per year and the Husband makes $50,000 per year, and there is one child, statute would indicate that the wife gets to claim the child 2 out of 3 years on a 3 year cycle. If incomes are similar or close then the parties would likely alternate years claiming the child. Moreover, the ratio for claiming the exemption is modifiable with a modification of child support, presuming incomes have changed.

C.R.S. 14-10-115 also sets forth certain exemptions or constraints on this rule. Specifically, if one party is ordered to pay child support to the other, statute sets forth that he or she must have paid all child support due and owing during the tax year allocated to claim the exemption in order to be entitled to claim the exemption. Statute is silent as to any deadline for having the support paid. As such, it can be important to either ask the court, or to build into an agreement a specific deadline. For example, an agreement or court order might say, “if the party owing child support has not paid all child support due and owing in a specific tax year by January 31 of the filing year, then he or she loses the right to claim the child for that tax year.” With this type of clarifying language there is no ambiguity as to deadline and the likelihood of both parties claiming the child decreases.

The other statutory exception is that in order for a party to claim the income tax dependency exemption for a child he or she must derive a tax benefit from it. Though most people generally will derive a benefit from claiming the exemption, there could be instances in which a party earns income to the degree that there is no benefit or a party might have no taxable income.

When negotiation your Denver divorce settlement, or going to hearing, it is important to make sure you, or your attorney, obtains specific language related to the dependency exemption. In cases of equal (50/50) parenting time, it may also be beneficial to agree to a plan for also sharing or alternating years, or kids, for Head of Household purposes. Keeping in mind that most Denver family law attorneys are not tax lawyers or CPA’s, it might not hurt to also tax with a tax expert before making certain decisions.

<< Back - 6 of 7
Main Child Support FAQs
Client Testimonials
His passion and ferocity kept me going through this long ordeal.
When I first came to Plog & Stein it was simply discuss the renegotiation of child support. Little did I know that within 72 hours I would be retaining Steve Plog for a custody battle. His passion and ferocity kept me going through this long ordeal. I have recommended him to my friends and I would recommend him to anyone with who wants honest and effective representation.
★★★★★
I recommend Sarah and the attorneys at Plog & Stein to anyone that has these types of family issues and need strong, knowledgeable representation.
I am thankful for the job Sarah McCain did for me in my fight with my ex-wife for visitation rights with my daughter. Sarah and the team at Plog & Stein handled my case in an efficient, affordable, and professional manner. Sarah negotiated a new parenting plan as well as acceptable visiting rights and even a favorable modification in my child support. I recommend Sarah and the attorneys at Plog & Stein to anyone that has these types of family issues and need strong, knowledgeable representation.
Tom
★★★★★
At the end of the day he was able to produce a settlement that was fair to both parties.
I highly recommend Stephen Plog for anyone in need of a top notch domestic relations attorney. After a 27 year marriage, Stephen represented me in a complicated and sometimes bitter divorce with many unique challenges. At the end of the day he was able to produce a settlement that was fair to both parties but limited my alimony payments to only 3 years. He is smart, cuts to the chase, knows the court system in the Denver metropolitan area and can be trusted to get his clients the best possible settlement.
Neal
★★★★★
Their service was outstanding, with prompt responses to all of my questions.
Sarah McCain and Plog & Stein were wonderful to me during such a difficult time in my life. Their service was outstanding, with prompt responses to all of my questions and creative ideas throughout the proceedings to help things go smoothly. Sarah's compassion, patience, and expertise were especially invaluable to me. I highly recommend them.
Sandy
★★★★★