New parents are sometimes surprised to discover the tax benefits that can come with having children. However, as some Texas residents can attest, those benefits can become some of the most hotly contested divorce issues. Claiming dependents can become complicated when a family splits up, which means it can be very helpful to research the matter ahead of time.
Generally speaking, in most states, the tax exemptions are applied to the parent considered "custodial," which is to say they are responsible for the child or children a majority of the time. Majority, in this case, refers to the number of nights a year one parent is responsible for the dependants. This general rule was designed to account for the number of parents attempting to balance their children's time with each parent.
However, in some cases, the noncustodial parent is allowed to claim the child or children on his or her tax return. Usually this is decided ahead of tax time and, indeed, ahead of the divorce and as agreed upon by both parents. If both parents agree to such an arrangement, they sometimes choose to "switch off" with one parent claiming the children one year and the other claiming them the next.
Communication is a key part of a successful separation free of divorce issues. Texas parents seeking divorce might benefit from talking about the ins and outs of tax exemptions prior to beginning the divorce process. This can help to ease the transition for their child or children, as well as account for one of the major financial decisions endemic to divorce.
Source: The Huffington Post, Children of Divorce: Who Gets the Tax Exemption?, Stann Givens, Mar. 13, 2014