How Do we Handle Tax Exemptions for our Kids when we Divorce?

Everyone knows when you have kids and you divorce in Utah, someone’s going to pay child support. What everyone doesn’t know, however, is what that means for their tax exemptions and deductions.

Someone has to be awarded tax exemptions for dependent children, so the question becomes how you award the exemptions. Here is what Utah law has to say about this:

Award of tax exemption for dependent children.

(1) No presumption exists as to which parent should be awarded the right to claim a child or children as exemptions for federal and state income tax purposes. Unless the parties otherwise stipulate in writing, the court or administrative agency shall award in any final order the exemption on a case-by-case basis.
(2) In awarding the exemption, the court or administrative agency shall consider:

(a) as the primary factor, the relative contribution of each parent to the cost of raising the child; and
(b) among other factors, the relative tax benefit to each parent.
(3) Notwithstanding Subsection (2), the court or administrative agency may not award any exemption to the noncustodial parent if that parent is not current in his child support obligation, in which case the court or administrative agency may award an exemption to the custodial parent.
(4) An exemption may not be awarded to a parent unless the award will result in a tax benefit to that parent.

Utah Code, Section 78B-12-217.

So, the statute says everything must be decided on a case-by-case basis, unless a parent is not current on child support or the tax exemption will not result in a tax benefit to a parent.

With so much discretion provided by the statute, here’s how tax exemptions work out in real life.

If a parent pays child support, that parent will be able to claim his or her kids on taxes every other year. It’s really that simple. That’s what Utah judges order at trial, and it’s what almost every couple agrees to in mediation and negotiation.

Now, there are exceptions to this (there are exceptions to everything), but if someone pays child support, and that someone is current on child support, that someone can expect to claim the kids every other year.

(Note: the law only talks about “exemptions.” It does not address deductions and credits. I’m not sure why this is — I think it’s an oversight by the Legislature — but it is. When we write agreements, we always include deductions and exemptions with exemptions. That way there is no confusion or game playing when it comes to taxes.)

Published On: January 15th, 2016Categories: Child CustodyComments Off on How Do we Handle Tax Exemptions for our Kids when we Divorce?
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About the Author: Marco Brown
Marco C. Brown was named Utah’s Outstanding Family Law Lawyer of the Year in 2015. He graduated with distinction from the University of Nebraska College of Law in 2007 and is currently the managing partner of Brown Family Law, LLC.
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