How Divorce Can Influence Taxes Owed

When North Carolina parents get divorced, they may be thinking more about their children than the IRS. However, there can be many tax issues to consider when parents decide to end their marriage. For instance, those who have children will need to think about who will claim the exemption for the child or the child tax credit. There are also credits related to child care expenses that a mother or father could be entitled to.

Only one parent is allowed to claim the dependent credit. Generally, the IRS allows the custodial parent to claim it, and the custodial parent is considered to be the one who provides more than half of the child’s support. However, the noncustodial parent can take this exemption if certain criteria are met. If there are questions as to who gets the credit, the IRS does have ways to end the dispute.

For example, if a dependent is not a qualifying child for either parent, the one with the higher adjusted gross income will be given the credit. This is also true if a parent could claim the child but doesn’t. If both parents claim the credit, whoever had the child for the longest period of time in the past year will be allowed to have it.

Parents who divorce may be responsible for paying child support. This money is generally used for everyday expenses, to cover health care costs and to pay for necessary educational expenses such as the cost of a tutor. If a person fails to adhere to a support order, there may be financial or other penalties such as spending time in jail. Noncustodial parents who are struggling to make their payments may ask for a modification to their current order.

Related Posts
  • Spring Break and Child Custody: How to Plan Ahead Read More
  • Inmates Now Allowed to File Motions to Modify Child Support Read More
  • What Are the Penalties for Neglecting to Pay Child Support? Read More