Serving Clients in Knox, Blount, Anderson, Loudon, Sevier & Roane Counties

Who Gets the Tax Exemption for Minor Children in a Divorce?

For parents going through a divorce, oftentimes the most difficult work comes into play fashioning a parenting plan to provide custodial periods for each parent. You must also make financial arrangements regarding the minor children that either you agree upon or you place the issues in front a judge or magistrate and the decision is made for you.

In Tennessee, child support is determined by the Tennessee Child Support Guidelines. However, child support is not the only financial consideration to be determined upon divorce. As a married couple, it is likely that you file joint tax returns and claim the minor children as a tax exemption together. After you are divorced, you may no longer file jointly and you both cannot claim the exemption for a minor child.

The form for the Parenting Plan in Tennessee provides a section to determine how the minor children will be claimed subsequent to the divorce. The Tennessee Child Support Guidelines have certain presumptions that are preset when calculating the amount of child support that is to be paid. One of the presumptions is that the party receiving the child support payment is the party that will claim the children as exemptions.

The guidelines make the following assumption regarding tax exemptions:  

“The alternate residential parent will file as a single wage earner claiming one withholding allowance, and the primary residential parent claims the tax exemptions for the child.”

Thus, the guidelines inform that the child support calculations are based on the assumption that the primary parent is claiming the tax exemption for the child. The parties may agree to divide or alternate the tax exemption. In the section provided in the parenting plan form, it denotes that if the person claiming the exemption is paying child support, then the child support payments must be current in order to make the claim and the person receiving the child support must provide the necessary tax forms permitting the dependency exemption.

The IRS has guidelines to determine who should claim the exemption, if parties are separated and filing separately, and the guidelines mandate that the custodial parent is entitled to the exemption and defines custodial parent as the parent who has custody the greater number of nights. If the parties share equal time with the child, the IRS determines that the party earning the higher income is entitled to the exemption.

However, during the course of a divorce, if the parties cannot agree then the alternate residential parent has to provide evidence to the trier of fact as to why the primary residential parent should not be entitled to claim the exemption as the guidelines presume. The alternate residential parent may claim payment for all of the extracurricular activities or private school costs or some extraordinary medical costs or other expense above and beyond those typically contemplated by the child support guidelines. The trier of fact may determine the appropriate allocation of the tax exemption.

If you’d like to discuss a divorce or child support guidelines with an attorney, call (865) 685-4780 to schedule a case assessment with Melanie Hogg or another Held Law Firm attorney.