Tax season is upon us, and inevitably, separated parents will question who may claim the children as dependents on their taxes. Many times, parents will come to an agreement on this beforehand. Some decide to alternate which parent claims the children each year. In bigger families, some parents decide to each claim one or two of the children. (i.e., father will claim John and mother will claim Ashley). But what happens in cases when the parents do not agree? With many people relying on their tax returns for various reasons, this can be a major challenge for parents to work through.

In 1984, Congress passed the federal Tax Reform Act, which gave clarity on this issue. Specifically, the Act provided that the primary custodial parent was automatically entitled to claim the children as a dependent except for certain instances or where the parents reached an agreement otherwise. The purpose of this was to maximize the income available to the children through a tax return. However, this Act still permitted the courts to intervene and allocate the dependency exemption to non-custodial parents if it better served the children. (Miller v. Miller, 744 A.2d 778 (Pa.Super. 1999).

What happens then, in cases where the parents have shared physical custody? Pennsylvania addresses this issue in the rules establishing support guidelines. The Dependency Tax Exemption permits the court to decide which parent may claim the children as an exemption in order to maximize the income available to the children. (Pa.R.C.P. 1910.16-2(f)).

It’s important to note that a judge or a support hearing officer must consider in some way the tax filing status or the tax refund when calculating support. An individual’s tax filing status will often be considered when calculating a support amount. In more complex cases, the tax return can be treated as gross income if the tax filing status was not previously considered in the calculation.

In either case, it may be important to reflect on child support and custody while preparing your taxes this season. Most people who receive or pay child support will never review their order. They simply allow support to be processed without questioning whether it’s reasonable when there are changes in circumstances.

If you are considering a modification to child support or looking to open a new case for child support, our office would be happy to assist you in the process.