Tax Fact: What About the Children?

There can be multiple tax benefits to claiming children on a tax return.  These include possible head of household status, exemptions, and child care deductions among other things.  However, if the parents are married but filing separately, no longer married, or never were married, only one of the parents is allowed to claim each of these benefits on his/her tax return.  In order to claim these benefits for a child you must list the child’s social security number.  This makes it very easy for the IRS to verify if one child is being claimed for the same benefit on two different tax returns.  Therefore, if both you and the other parent claim the same child tax benefit on each of your respective tax returns it can be an audit trigger and cause both of your tax returns to be reviewed.

The determination for the proper parent to claim the child tax benefits can be done through a marital settlement agreement or by following the IRS rules.  In either situation, the key factor is to make sure that the parents agree on the outcome.  Even if one parent uses the marital settlement agreement or IRS rules to correctly claim a child tax benefit, if the other parent also claims this benefit it could cause both parents to get audited.  Despite the fact that the correct parent would not have an issue with claiming the child tax benefit when audited, there could be other items on that parent’s tax return that come under review as part of a general audit.

When going through a divorce or defending the proper claiming of a child tax benefit, it is very important to understand the rules and proper presentation.  If you have questions on this topic or need assistance defending claiming a child tax benefit on a tax return, contact us at Hone Maxwell LLP today.  Also,  you can follow us on twitter @HMLLPTax or facebook at for more tax tips and the latest updates on tax news.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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