Statutes Regarding Tax Exemptions for Dependents & Divorce
Statutes Regarding Tax Exemptions for Dependents & Divorce. Going from married to divorced will inevitably alter the number of exemptions you’re eligible to claim on your income tax return. Instead of collectively claiming you, your spouse and dependents on one return, you’ll need to split your exemptions. How you split your exemptions will depend on both tax law and your divorce decree.
Exemptions reduce your taxable income by the exemption amount. For the tax year 2010, the deduction amount for each exemption is $3,650. Two types of exemptions are available: personal exemptions and dependent exemptions. Personal exemptions are those for yourself and your spouse, while dependent exemptions are those for your dependents. Under Internal Revenue Code, a filer is eligible to claim each qualifying child or relative.
The Internal Revenue Service, or IRS, tax law states that you are considered married if, on the last day of the tax year, you are living together as husband and wife; living together in a common law marriage recognized by your state; married and living apart but not legally separated; or living apart under a divorce decree that is not final. If you and your spouse are divorced, you cannot claim your spouse’s exemption on your income tax return or file as married. Only married filers can file jointly or separate, and individual filers must use head of household, single or qualifying widow or widower as their filing status.
If you are divorced from your spouse, then the IRS requires that you follow the rules established for exemptions and dependents. To claim a dependent on your return, the dependent must meet the criteria as a "qualifying child." This means that the dependent must meet the relationship, age, residency, support, and joint return test. To meet the age test, the child must be under the age of 19 at the end of the tax year or 24 if the dependent is a full-time student. To meet the support test, you must be the majority of support for the child during the tax year. To meet the residency test, the child must live with you for the majority of the year. The dependent meets the relationship test if he is your child, stepchild, step-brother, step-sister, half-brother, half-sister, foster child or a descendant of one of these persons. Since the residency test requires that a child must have lived with a parent for more than half the year, custodial parents usually own the right to claim the child's exemption. However, if the custodial parents releases the dependency via IRS form 8332, then the noncustodial parent can claim the child's exemption.
Divorce decrees prescribe the expectations and responsibilities of the divorced parties. If the decree prescribes an arrangement for how you and your spouse are to claim your dependents, then you should follow the decree. For example, if the decree states that you are to claim your child on even years and your co-parent is to claim the child on odd years, then that is how you should file. Additionally, Internal Revenue Code states that filers can enter into a multi-supoort agreement. This agreement allows a taxpayer to claim a child if he is part of a group who collectively provided more than half of the support for the child. Members of such a group usually take turns claiming the child.
State exemption rules typically mirror the federal standard. For example, the Georgia exemption amount is less than the federal amount but an exemption is your natural or legally adopted child. But if you meet the eligibility requirements to claim your dependents on your federal return, you generally meet the requirements to claim them on your state tax since state requirements are usually much more lenient than federal requirements.
- IRS.gov: Publication 504 -- Divorced or Separated Individuals
- Georgia Department of Revenue: Individual Income Tax Instructions
- Georgia State University School of Law: Dependency Exemptions