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Chandra E. Miller

A Northern California Family Law Firm

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How custody and child support affect taxes

| Feb 24, 2016 | Child Support

California parents who pay child support cannot automatically claim those children as dependents on their federal income tax returns, and they are not allowed to deduct those payments. The dependent child exemption is based on custody and not on how much financial support is offered.

Custodial parents who want the parent paying child support to have the exemption can do so by signing a document making this declaration as well as IRS Form 8332. The other parent also has to sign the form and include it with their tax return. The parent who receives child support does not have to count that support as income and therefore does not have to pay taxes on it.

Parents who share custody cannot split the dependent child exemption. The solution for some parents is to claim the child in alternate years. In order to avoid misunderstandings, parents may want to write this into their parenting agreement.

While child support in California is determined using a formula, it is important that parents include accurate information as well as expenses such as health insurance and day care costs so that support is calculated correctly. Some child support goes unpaid each year, and parents who are struggling to pay child support due to a change in material circumstances can go to court to request that the amount be lowered. Parents who are not receiving their child support can also seek legal help. Parents may find that if they can agree about child custody and visitation without resorting to litigation, they are happier with the outcome and better able to work together as parents afterward. However, in some cases, both parents may want primary custody. An attorney may be helpful in putting together a strategy that will demonstrate the best interests of the child to the court.