When two parents are not married, it is sometimes unclear who will receive the income tax dependency exemption for their joint minor child(ren). The first step is to check any prior Court Orders involving child custody, parenting time, or child support to see if the Court has already addressed this issue in your case.
If the Court has not addressed the tax dependency exemption for your case, the Internal Revenue Service (IRS) rules govern. Under the IRS rules, the “custodial parent” or, the parent who the child lives with for more than half the year, is generally the parent with the right to claim the tax dependency exemption for a minor child.
Minnesota Law grants the Court power to make a determination that is different from the IRS rules. Under Minnesota Statute 518A.38, Subdivision 7, the following factors will be considered by the Court when allocating the income tax dependency exemption:
(1) the financial resources of each party;
(2) if not awarding the dependency exemption negatively impacts a parent’s ability to provide for the needs of the child;
(3) if only one party or both parties would receive a tax benefit from the dependency exemption; and
(4) the impact of the dependent exemption on either party’s ability to claim a premium tax credit or a premium subsidy under the federal Patient Protection and Affordable Care Act, Public Law 111-148, as amended, including the federal Health Care and Education Reconciliation Act of 2010, Public Law 111-152, and any amendments to, and any federal guidance or regulations issued under, these acts.
If there is only one minor child, a common arrangement is for one parent to have the ability to claim the income tax dependency exemption during all even years, while the other parent would claim the income tax dependency exemption during all odd years.
Keep in mind, even if you are awarded the right to claim the income tax dependency exemption, the Court can place conditions on your right to claim the exemption. The most common condition the Court places on this right is that all child support obligations must be up to date.
If you are not the parent who has the child for more than half of the year, the other parent will need to sign a release allowing you to claim the child as a dependent on your tax returns.
If you have any questions about your ability to claim your child as a dependent for purposes of the income tax dependency exemption, please call me today at 651-647-0087 or reach out via our online contact form to set up your free consultation.