Can I Claim My Child as a Tax Dependent After Divorce in Illinois?

 Posted on August 12, 2021 in Child Custody / Allocation of Parental Responsibilities

Married parents can claim their child as a dependent exemption on their joint tax return. After divorce, however, only one parent can claim a child as a dependent for tax purposes. Because the ability to claim dependent exemptions can make a major difference in a parent’s finances, being able to claim your child as an exemption is often as good as money itself. Understandably, the tax implications of divorce can be a topic of contention.

Include Child Tax Exemptions in Your Divorce Decree

In the midst of divorce negotiations, who gets to claim a child as a dependent exemption is often forgotten until after the divorce is finalized. This could be a costly mistake. Illinois no longer uses the terms “custodial parent” or “child custody,” but the IRS still does. The IRS sees the parent who spends the most time with the child as the custodial parent, and unless parents specify another arrangement, the IRS default is that the custodial parent gets to claim the child as a dependent on their taxes.

However, if parents are proactive about arranging exemption claims, they can do it however they wish. They may alternate years, or, if they have multiple children, agree to split the exemptions so each parent may claim one or more children. Include the discussion about child-dependent exemptions in the broader conversation about asset division, child support, and spousal maintenance. Parents who work cooperatively can usually come to a holistic financial resolution that suits them both better than if a judge were to make the decisions for them.

What Happens if We Both Claim our Child as a Dependent Exemption?

If you have a provision in your divorce decree regarding who can claim your child as a dependent, wrongfully claiming your child would be a violation of a court order and may be grounds for being held in contempt of court. Additionally, two parents claiming a child on a tax return could halt the tax return process and trigger an IRS audit. If you claim the child knowing that you do not qualify to do so, the IRS could find you guilty of tax fraud and you could be charged with a felony and serious penalties, including fines and jail time.

Contact a DuPage County Divorce Attorney

Your divorce decree can have long-term financial implications for you and your child and ensuring you have a fair asset division that prepares you for the future is essential. Having an experienced Naperville divorce attorney on your side during the divorce process can help you achieve a favorable outcome. Contact the office of Calabrese Associates today at 630-393-3111 and schedule your confidential consultation today.

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000

https://www.irs.gov/faqs/filing-requirements-status-dependents/dependents

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000