What Divorcing Parents Need to Know About Taxes and Children
If you're going through a divorce and have children, taxes might be the last thing on your mind — until they suddenly become a big deal. Who claims the kids? What about the Child Tax Credit? Does “custody” mean you get the tax benefits? It can feel confusing fast.
Here’s what you need to know — and what I help clients walk through all the time.
Head of Household vs. Single
First, if you’re not married on December 31st, your tax filing status becomes either “Single” or “Head of Household.” Head of Household generally gives you a better tax rate and a higher standard deduction — but only one parent can claim it. You must have paid over half the cost of keeping up the home and had your child live with you more than half the year (more nights).
Yes, two parents can each claim Head of Household — but only if you have more than one child and each child lived primarily with one parent.
Claiming the Child Tax Credit
This $2,000 credit goes by default to the parent the child lived with most of the year. But it can be transferred to the other parent using IRS Form 8332 — if both parents agree. That agreement should be clearly written into your divorce documents to avoid future problems.
Why This Matters
The tax savings from Head of Household and Child Tax Credits can be significant. But the rules are strict, and the IRS doesn’t always follow your divorce decree — they follow federal law.
That’s why it’s essential to understand your rights and responsibilities before tax season hits. I can walk you through this and make sure you’re not leaving money on the table — or setting yourself up for IRS issues later.
Disclaimer:
NOT LEGAL OR TAX ADVICE: This information is for general informational purposes only and does not constitute legal advice or tax advice. It is not intended to be a substitute for professional legal or tax advice. You should seek the advice of a qualified attorney or tax professional for advice, support, and/or services tailored to your specific facts and circumstances. This communication does not create an attorney-client relationship, nor is it a solicitation to offer legal advice. IDFA and its representatives make no warranties about the information contained herein and assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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