Do you qualify for tax dependency exemptions?

It’s that time of year that we are all anxiously awaiting our W-2s, 1099s and other information that we need to prepare our tax returns in hope of a big fat refund.

So then why is a non-tax attorney addressing the issue of tax dependency exemptions?

For those of us who have children, the answer is simple.

For couples who have a child in common but are no longer married (or who have not been married and are living apart), the question arises as to who shall claim the tax dependency exemption.

The Idaho Child Support Guidelines — which governs who gets to claim the tax dependency exemption after a divorce or a child custody case is concluded — states that the court will award the tax dependency exemption to the person who would derive the greater benefit, unless the parents agree to a different arrangement.

Who would derive the greater benefit is sometimes in dispute, and the parents may need some assistance as to which one should be awarded the right to claim the tax dependency exemption.

The parents can also come to a different arrangement than what the courts would grant.

For example, the parents could agree that the mother claims the dependency in odd years and the father claims the dependency in even years, or if there are multiple children, each parent could claim one or more children and the other parent claims the other child or children.

A (prior) court order (Decree of Divorce, Order Establishing Paternity, Child Support Order, etc.) should contain a clause that states who gets the tax dependency exemption(s).

However, if you are contemplating a new action (divorce or an action to establish child support or custody), or modifying a previous order, this issue should be considered and reviewed.

How does this affect child support?

Again the Idaho Child Support Guidelines tell us that if one parent can claim the tax dependency exemption, the other is entitled to a monthly offset to child support, either as a reduction or addition to the monthly child support amount.

It sounds a little complicated, but once you know how to look at a person’s income and situation, it can be easily figured out by a professional.

Parents also need to examine if their income has changed over the last year and if any of their prior orders need to be updated.

This would be a modification process (of prior orders) and can be done if there is a substantial and material change of circumstances to the degree that warrants a change in child support, other matters related to finances for the child which includes the tax dependency exemption, or custody. Since the tax season is quickly approaching us, there will be more on the child custody issues in upcoming articles.

We have assisted hundreds of parents with these very issues, by first reviewing their individual situation and the needs of the family and then discussing options that are available.

Merrilee A. Parr, Attorney at Law, has been assisting and representing families in the North Idaho area since 1997 as a solo practitioner.

A solo practitioner will give you the attention and time you need to carefully review your situation and discuss all of your options so that you can choose the best method for your needs.

Merrilee can be reached for an appointment at her downtown Coeur d’Alene office at (208) 667-1227.