Overview

An exemption is an amount of money you can subtract from your Adjusted Gross Income, just for having dependents. This will reduce the amount of income on which the parent who is granted the tax dependency exemption will be taxed. Only one parent may be assigned the right to claim a minor child as a dependent for tax purposes for each calendar year. The issue is often decided by the Court in the Divorce Decree. As a result, the Divorce Decree provides guidance to both parents when it is time to file taxes.

How a tax dependency exemption is assigned

The Court may order the tax dependency exemption be awarded to one party, or the Court may order that the parents alternate (for example: father gets the dependency exemption in tax year 2013 and mother gets the exemption in tax year 2014 and so on). If the Divorce Decree does not address the tax dependency issue, Internal Revenue Service rules state that the person who is awarded sole physical custody (or has the child for more than 50% of the time) can claim the child as a dependent for tax purposes. If you are awarded sole physical custody and claim your child as a dependent, you may also be eligible for the child tax credit.

You no longer have to show that you provide more than half of the child’s support. To qualify for the exemption, the child must live with you more than half of the year and be under 19 years old at the end of the tax year, or under 24 years old and a full-time student for the year.

Modifying a tax dependency exemption award

In a situation where a parent can prove that an award of the tax dependency exemption is unreasonable and unfair, such as when a parent incurs a financial hardship due to loss of income, or increased expenses, the court can modify the award of the dependency exemption.

The parent who is facing financial hardship due to changes in her or his circumstances, or simply wonders about the fairness of a child support or dependency exemption award, should consider a review of both the child support order and the award of the dependency exemptions, as modifications can be considered under Minnesota Child Support law.

If you have questions concerning the Minnesota tax dependency exemption, our divorce attorneys can work with you to ensure that you understand the process. At Clausen & Hassan, our lawyers pride themselves on how they serve our clients. Please reach out today for your free consultation—you can call our office at (651) 647-0087 or contact us by email at info@clausen-hassan.com.