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Child Custody Determination:Dependency Exemption and Child Tax Credit?

In a Child Custody case a Dependency Exemption is an issue that comes up in almost every dissolution action. A "custodial parent" for tax purposes means the parent with whom the child lives with the greater number of over-nights during the year. If the child was equally with both then the "custodial parent" is the one with the higher adjusted gross income which is known as the tie breaker rule, under the tax code (we are not tax attorneys so please seek the advice of a tax attorney or CPA for all the specific tax rules that would apply to your family).

In the case of a child of divorced parents, if the child gets one half of the support from the parent, and is in the custody of either parent's custody during the year, then that child is treated as receiving over half of the support from that parent. A child resides with the parent if the child sleeps at the home of that parent whether the parent is present or not, or if in the company of the parent (if they are on vacation together).

When the child reaches the age of 19, neither parent has custody, but the parent that provides over half of the support may take the dependency exemption if the child is a student, and has not reached the age of 24. This would be outside of the domestic arena, as in general a support obligation ceases upon the child's 18th birthday, or at their graduation if older than 18, but prior to their 19th birthday.

Although the custodial parent is the one who can take the exemption and child tax credit, they may allow the non- custodial parent to take the exemption and credit through a form with the IRS. The dependency exemption phases out when the taxpayer reaches a certain income level. The child tax credit cannot be split from the dependency exemption.

Again, In a Child Custody case Florida no longer uses the word "custodial parent"; however, in other areas of the law (specifically federal law) the term is still utilized, that is why in the Parenting Plan there should be a section that states something along the lines of Designation for other legal purposes.

For more information about child support, and how taxes affect child support contact our office at; however, if you require specific tax advice please call a tax attorney or your CPA.

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