Understanding Income Tax Filing as a Divorced Parent: Key Considerations

mother filing income taxes

It’s tax time again.  And whether you are newly divorced, or in the middle of a divorce, there are a few issues that you need to be aware of related to your income taxes going forward.  The primary areas you will need to consider are dependent claims, child support and alimony.  If your settlement is not yet complete, being aware of these issues, and addressing them in the settlement, will make things easier for you in the future. 

Determining Dependent Claims

One of the most important considerations for your tax filing as a divorced parent is which parent will claim the children as dependents on their tax returns.  The child tax credit is $2,000 per child, of which $1,600 is refundable for 2023.  Because this is a credit, and not a deduction, it directly reduces the amount you will owe to the IRS and is very valuable.  However, only one person can claim a child as a dependent, so there needs to be a clear plan between divorcing parents.

The general rule related to child tax credits is that the custodial parent has the right to claim the dependent on their tax return.  However, with shared custody, this can get murky.  Technically, whoever has the child the most (defined as 183/365 days during the year) gets to claim the child.  If neither parent meets that standard (the child is with each parent 182.5 days per year) then the person with the higher Adjusted Gross Income (AGI) is entitled to the credit.  While these are the rules the IRS would follow if auditing you, other scenarios can be negotiated between the parents.

While time spent with each parent is a factor the IRS will look at, there may be other issues that you and your ex-spouse want to consider.  For example, it is possible that one parent has the child in their home for more time each year but that the other parent is responsible for more of the expenses related to the child.  In this case, it may make sense for the primary financial provider to take the tax credit.  If this is something you decide to do, the custodial parent can formally release their right to claim a child as a dependent by filling out Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.

There are also other creative ways you can settle this issue with your ex-spouse in a shared custody arrangement.  One possibility (if you have an even number of children) is to each claim half of the children on your tax return.  Another choice might be to alternate years, for example you claim the children in even years and your ex-spouse in odd years. 

You do have flexibility in how you decide to address this issue, but it is important that the parents communicate and agree because if you both claim the same child your taxes will be rejected, and you will open yourselves up to audit.  As with any agreement related to divorce, I would recommend having it included as part of your settlement agreement so that you have documentation in case there is a question in the future.

Impact of Child Support on Taxes

Another financial element of many divorces is that of child support.  From a tax standpoint, child support is much easier to understand than dependent claims.  Child support is neither income to the recipient nor deductible to the payor.  Because the money is for the expenses of your child, it is treated the same as if you were spending it on your own expenses and it is not deductible for anyone.

Tax Considerations for Alimony

The final financial agreement in divorce that may affect your taxes is that of alimony or spousal maintenance.  With alimony, the tax treatment will depend on when your divorce was finalized.

For divorces finalized in 2018 or earlier, any alimony or spousal maintenance is deductible to the payor and taxed as income to the payee.  For any divorce finalized in 2019 or after, alimony is not tax deductible to the payor or taxable to the payee.  Under the current rules, alimony, spousal maintenance, and child support all receive the same tax treatment.  This rule was changed to eliminate the opportunity to classify child support as alimony for better tax treatment to the payor.  Unless you were divorced prior to 2019, there is no tax impact for any alimony you will pay or receive.

Communication and Planning Are Key

There are a number of financial agreements that can be made as part of your divorce, some of which will affect your tax filing going forward.  The most important item to consider is which parent will claim the children as dependents on their tax return.  If you have a shared custody agreement this isn’t always straight forward.  It is important to communicate openly with your ex-spouse about who plans to claim the dependents.  If possible, it is advisable to agree to and document this decision as part of your divorce settlement.

If you are interested in learning about how I can help you take charge of your finances as a newly single woman, please contact me at  or schedule a free 20-minute consultation.

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