Stephen J. Buhler, Attorney at Law

Who gets to claim a child for tax purposes after a divorce?

With April 15 quickly approaching, many Salt Lake City residents are in the process of completing their tax returns. This is often not the most pleasant of experiences for many, although some individuals may look forward to receiving some money back from the government.

One issue that arises in many individuals' tax returns is the earned income tax credit, or EITC. For those individuals who qualify for the EITC credit, they can receive a portion of the taxes they paid back, and therefore some individuals may be able to get a tax refund based largely on the EITC.

Parents in particular can benefit from the EITC, as they can receive a greater amount than others because of their children. The particular amount varies depending on how many children the parent has to claim on the return, as well as the person's income.

There are residency requirements that apply in connection with the EITC, however, which can be somewhat confusing in child custody situations after a divorce. Typically, the IRS requires that a child live with the taxpayer for more than half of the year. Accordingly, for those parents in a joint custody situation, generally only the parent who had physical custody of the child for more than six months can claim the EITC credit on his or her return.

There are situations, however, where both parents may be able to claim the credit. For instance, if the divorce occurred during the year, the child may have lived with both parents for more than six months. In these situations, the parents must decide who will claim the credit.

If the parents do not agree, the IRS has certain rules is uses to decide which parent is able to claim the EITC credit. One rule, for example, looks at which parent the child lived with for the longest period of time during the year. If this time is equal, the parent who has the highest adjusted gross income would be able to claim the credit.

The situation can become more complicated if multiple children are involved among the two taxpayers. Accordingly, individuals should understand how these tax rules work in order to properly claim the EITC credit on their return.

Source: Fox Business, "Earned income tax credit could pay off," Kay Bell, April 3, 2015

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