W-2’s are going out in the mail from employers and tax time is upon us. Many newly divorced parents wonder who gets to claim the child on taxes after divorce? As a general rule, under Missouri law, the custodial parent claims the dependency exemption for the eligible children. Unless there is an agreement otherwise, this is what the Missouri courts will order. Missouri child support and child custody laws are in sync with Federal tax law in this regard. The Federal law states that the custodial parent is the parent with whom the child spends the most nights during the tax year. If both parents had the children for the same number of nights during the tax year, the parent with the highest adjusted gross income gets the exemption.

The dependency exemption and the child tax credit can be shifted from one divorced parent to the other by agreement of the parties. Options include alternating years, which helps to equalize the exemption benefits between the parents, or where there are multiple children, specifically splitting the children between the parents for tax purposes. For example, parents with four children in total can claim the same two children each year to avoid problems with the IRS and state authorities. If there is no provision for the tax exemption within your divorce decree, and the divorce decree was entered after 1985, parents must execute IRS Form 8332 every year, specifically assigning the tax exemption to one parent or the other.

IRS Publication 501, Exemptions, Standard Deduction, and Filing Information is available for download. This publication describes the rules related to allocation of the dependency exemptions and the child tax credit between divorced and separated parents.

The rules related to allocation of dependency exemptions involve many exceptions and qualifications. Divorced parents should discuss the dependency exemption and child tax credit allocation issue with their family law attorney or tax advisor.