As April 15th approaches, a question that is frequently presented by parties going through a divorce is “which one of us gets to claim the children on our tax returns?” The answer is…. it depends.
A.R.S. 25-320 requires the Supreme Court of the State of Arizona to have in place guidelines for the calculation of child support. The Arizona Child Support Guidelines were created by the Supreme Court of Arizona pursuant to this requirement.
The Guidelines were recently revised in 2015. A copy of the current 2015 Guidelines can be found here:
Section 27 of the Guidelines addresses the Federal Tax Exemption for Dependent Children. The guidelines require the exemptions be designated as part of any child support order. The actual relevant language in the guidelines is as follows:
All the federal and state tax exemptions applicable to the minor children shall be allocated between the parents as they agree, or, in the absence of their agreement, in a manner that allows each parent to claim allowable federal dependency exemptions proportionate to adjusted gross income in a reasonable pattern that can be repeated in no more than 5 years.
While this may sound complicated it is really fairly straightforward to calculate. To illustrate how this calculation applies, consider the following hypothetical situation:
Jim and Jane have one minor child who we will call John. Jim and Jane are getting divorced and a child support order is being entered pursuant to the Arizona Child Support Guidelines. Jim is a teacher and makes $3,000 per month as his gross (before tax) income. Jane is a bank executive and makes $9,000 per month as her gross income. The parties combined gross income for child support purposes is then $12,000 ($9,000 + $3,000). Of that $12,000, Jane is contributing 75% of the total gross income ($9,000/$12,000 = .75) and Jim is contributing 25% of the total gross income ($3,000/$12,000 = .25). In this hypothetical Jane would claim John as a dependent on her tax returns 3 out of every 4 years (3/4 = .75) and Jim would claim John as a dependent on his tax returns 1 out of every 4 years (1/4 = .25). Beginning with year 5, assuming there were no changes to income, the cycle would then repeat.
However, there are other factors that can come into play that may change the outcome in the hypothetical above, such as whether or not the monthly child support payments are being made on time. That factor would change who claims the minor child as a dependent in a given tax year.
Additionally, there may be specific language that needs to be added to any child support order to insure each parent is able to claim the child in their given year such as completing any necessary IRS forms.
To insure the tax exemption is properly applied and to insure each parent is able to utilize the tax exemption in their year it is important to seek the assistance of an attorney.
James L. Cork II is an Associate Attorney at Fromm Smith and Gadow PC. Mr. Cork has been practicing Family Law since 2008. Mr. Cork has represented hundreds of clients in the following practice areas: Dissolution of Marriage, Legal Separation, Child Custody, Child Support, Spousal Maintenance, Paternity, Grandparent Rights, and Relocation. To schedule a consultation with Mr. Cork please call 602-955-1515.
This answer is for informational purposes only. It is not intended, nor should it be construed as legal advice. No attorney-client relationship shall exist unless and until an agreement for legal services is reached between attorney and client, and a legal services contract is fully executed by and between attorney and client.