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Claiming children as dependents on taxes after divorce

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With the passage of the Tax Cuts and Jobs Act, Georgia parents can no longer use the personal exemption when filing their tax returns. However, they can take twice the amount for the child tax credit, $2,000 instead of $1,000, along with the Dependent Care Credit.

Problems may arise if the parents are divorced and do not agree on who will claim the child as a dependent. Usually, this is the custodial parent, but with the initial tax filing, the IRS will accept the claim of the parent who files first. If there is a dispute, the agency allows the claim to be made by the parent the child lives with most of the time. If the parents share custody and the child spends roughly equal time with each parent, the IRS next looks at the adjusted gross income for each parent. It is assumed that the parent with the highest income contributes more money to the child’s care, so that parent is allowed to claim the child as dependent.

In some cases, a custodial parent may want to give the noncustodial parent the right to claim the child. This involves filling out IRS Form 8332. This right can be allowed for one or multiple years. The form can also be used to revoke a noncustodial parent’s right to claim the child.

Taking turns with who has the right to claim the child is one way parents with just one child may resolve this issue. Sometimes, when parents have two children, each one claims one child as a dependent. People who are divorcing should also be aware that the Tax Cuts and Jobs Act has affected alimony. While it used to be tax deductible for the payer and treated as income for the recipient, this is no longer the case.

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