Custody gives you the right to live with and make decisions about your child. Along with it come the financial responsibilities of caring for your child. Not surprisingly, custody can also affect your post-divorce taxes in a few ways. To be prepared for tax season, keep these pieces of information in mind.
Which Parent Gets the Tax Break?
Generally speaking, the custodial parent gets to claim the child as a dependent. The non-custodial parent who gets visitation time does not share the day-to-day responsibility of providing for the child so does not get the dependency claim.
When parents share physical custody, however, the rules are less straightforward. Typically, unless the parents agree otherwise, the parent who has the child the most during the year gets to claim him or her as a dependent. If the parents share physical custody equally, the parent with the higher adjusted gross income (AGI) typically claims the child as a dependent.
These general rules are based on the proportion of financial responsibility each parent has for the child. The parent with the more significant financial responsibility usually deserves the dependency claim. But parents can work out alternative arrangements if they agree. For example, parents who share physical custody can alternate years for claiming the child. Or, one parent can agree to pass along the claim to the other parent if it would benefit that parent more.
What About Other Benefits?
For other tax benefits, such as education credits or medical deductions, the benefit typically goes to the parent who covered the cost. Also, there are no tax benefits for paying New Jersey child support. You cannot write off child support, and the other parent does not have to claim it as income. What matters more is with whom the child lived with most of the year.
You should consult with a tax advisor if you have further questions about how custody can affect your post-divorce taxes. Unless you have an agreement in place, you might need to work with a tax advisor and a child custody attorney to reach one with the other parent. A New Jersey child custody attorney can advise you of how custody can affect your post-divorce taxes and what other parents have done in similar situations. Because you might have some flexibility when filing your taxes as a co-parent, it’s best to work with the other parent and your attorneys to find a solution that benefits you both.
If you need child custody guidance in New Jersey, the Williams Law Group, LLC is here to help. The experienced child custody attorneys at Williams Law Group, LLC can help you protect your rights as a parent. Located in Short Hills, New Jersey, Williams Law Group, LLC provides compassionate and dedicated legal services to Union, Bergen, Essex, Hudson, Morris, Monmouth, and Middlesex counties, and the surrounding areas. Our knowledgeable attorneys handle divorce and family law, child custody, and child abuse/neglect cases. Call our office at (908) 738-8366, email us at email@example.com, or contact us through our confidential online form to schedule a consultation and ultimately get you connected with an experienced New Jersey divorce and child custody attorney.