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Who Claims a Child on Taxes with 50/50 Custody?

patrickcrawford | August 28, 2023

Once you establish that you and your ex will be sharing child custody with one another equally, set a parenting schedule that works for you, and receive your court orders, you’ve accomplished a lot. One aspect of child custody that many divorcing parents forget to carefully assess, however, is the matter of who is entitled to the child tax credit, and the issue can be all the more confusing if you split your time with your shared children evenly. 

 

If you have questions or concerns regarding taxes and child custody, reach out to a dedicated Maryland child custody attorney who has extensive experience resolving all child custody-related concerns

 

When One Parent Is the Primary Custodial Parent

When one parent is the primary custodial parent – with whom the children spend the majority of their overnights – the issue of taxes is clear. In the State of Maryland, the custodial parent has the right to claim the children as dependents on their taxes – unless a specific exemption is filed with the IRS. In order for an exemption to hold, it must be specific about the years the noncustodial parent is entitled to use the tax exemption and must be signed by both parents.   

 

When parents share more than one child, they can divide the attendant exemptions between themselves each year, and as a result, they will each file separately as head of household. When there’s only one shared child, however, or when the custodial parent claims all the children, the custodial parent files as head of household, and the noncustodial parent files as a single person – unless either parent’s marital status has changed, which may affect how they file. 

 

The Tiebreaker Rule

If you and your ex do not address the matter of taxes in your divorce decree, you can’t reach a mutually acceptable agreement on the matter, and you split your time with the children 50/50, the IRS will resolve the matter for you, and you may not like the results. The IRS employs what is known as the tiebreaker rule. 

 

When the IRS takes it upon itself to break a tie in relation to claiming a child on an individual’s taxes, it gives the credit to the parent who is the highest earner. Yes, this is the parent who earns more and presumably has fewer financial needs, but the IRS bases its decision on each parent’s tax bracket – and the higher the parent’s earnings, the higher their tax bracket, which translates to higher taxes. 

 

The idea behind the child tax credit is to afford families with qualifying children a tax break. There is, however, an earning cap – after which a parent or couple no longer qualifies. If you and your ex both claim your children on your taxes in the same year, the IRS will kick them back to both of you, and they will audit at least one of you if you don’t resolve the matter between yourselves. This can obviously significantly increase the time it takes to receive your tax refund. 

 

Further, the IRS will not be interested in debating the issue with either of you and will simply extend the child tax credit to the parent who earns more unless you are able to come to a mutually acceptable resolution. 

Daughter of divorcing parents worried

Your Divorce Decree

If you and your ex share custody of your shared children 50/50, your divorce decree should address the matter of your child tax credit. The basic options include:

  • Each of you can claim the children on your taxes every other year, which means one of you takes the credit on even years, and the other takes the credit on odd years.
  • You can divide the tax credits between you each year, which obviously only works if you share more than one child but it can be a happy compromise.
  • If one parent doesn’t qualify for the tax credit for one reason or another, the other can take the credit every year.
  • If the child tax credit is more valuable to one parent than the other, that parent may offer something else of value in exchange for the right to use the credit every year.

 

If your divorce decree is quiet on the matter of the child tax credit and you and your ex cannot reach an agreement between yourselves, it may be time for a modification that addresses the issue head-on. The child tax credit is substantial, and you don’t want to miss out on this economic opportunity if it’s one to which you are entitled.  

 

The IRS’s Position

It’s important to note that the IRS will only become involved in the matter of your child tax credit if it’s called upon to do so. Their rules on the matter are technically guidelines that parents can ignore – as long as they have a court order that addresses the matter or have reached a mutually agreeable decision. 

 

If you both claim a child in the same year, you involve the IRS, but you’ll still have an opportunity to rectify the situation without resorting to the agency’s fallback position of affording the credit to the higher earner. As long as you’re able to resolve the matter without interrupting the timely completion of your taxes, the IRS will not get involved. 

 

If you and your ex are at a standstill on the issue, don’t delay in consulting with a trusted child custody attorney to establish your rights legally and to help ensure that you don’t encounter future problems in relation to your annual taxes.  

 

An Experienced Maryland Child Custody Attorney Is Standing By to Help

Patrick Crawford at the Law Office of Patrick Crawford in Annapolis is a seasoned child custody attorney who recognizes the significance of your child tax credit and has the experience and legal insight to fiercely advocate for a resolution that protects your financial rights and works for you. To learn more about what we can do to help, please don’t hesitate to contact us online or call us at (410) 216-7905 today.

Patrick Crawford

Patrick is an Annapolis Family Lawyer dedicated to helping you through the most complex and emotional family law matters. During his career, Patrick has successfully represented countless people in divorce, child custody, child support, domestic violence and other family law cases of diverse complexity.

Years of experience: 20+ years.
Maryland Registration Status: Active and authorized to practice law.

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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Patrick Crawford, who has more than 16 years of legal experience practicing family law.