What Your Child Custody Arrangement Means for Your Tax Return

You may be able to begin your taxes. You’ve collected your W-2, 1099’s and alternative documents. you've got last year’s form for steering. But, if you’ve gotten unmarried  within the last year, this year’s taxes is also terribly totally different.

The U.S. tax code provides substantial tax breaks to families with kids. These tax breaks square measure meant to offset the price of raising a family. They embrace Associate in Nursing exemption for every kid, a toddler diminution, and credits and deductions for education and child care expenses. throughout your wedding, you and your family shared these tax breaks. But, once a divorce, the credits and deductions will now not be shared.

In Pennsylvania, it's common for unmarried  oldsters to share custody of the kids. every parent contributes to the price of raising the kids. Since each you and your ex square measure paying the children’s expenses, it appears logical that you simply would each be able to claim Associate in Nursing exemption. However, the tax code doesn’t work approach.

The authority permits just one parent to say a toddler on their taxes. In most cases, the protective parent gets the deduction. But, what happens if each oldsters share custody?

Under authority rules, the parent with whom the kid spends the foremost nights throughout the year is that the protective parent. If time is split equally between the oldsters, the parent with the very best adjusted gross financial gain gets to say the kid on his or her taxes. But, this might not be the simplest answer for each family.

When there's quite one kid, unmarried  oldsters have the choice of rending the deductions, therefore every parent gets tax advantages. To do this, the protective parent should complete out authority kind 8832. The deduction will be given up for one year or for multiple years. The non-custodial parent should attach a replica of the shape to his or her taxation come so as to say the deduction.