In general, the custodial parent claims the child for tax purposes. If the court does not make any orders about the tax deduction, then the custodial parent automatically claims the child as a dependent for tax purposes. The income tax rules say that the parent having custody for a greater portion of the calendar year receives the deduction. This is an IRS rule.
A court, can, however, order that the non-custodial parent be allowed to claim the child for tax purposes. The court will order the custodial parent to sign the proper IRS forms to allow the non-custodial parent to claim the child for tax purposes. If the court orders the non-custodial parent to claim the child on taxes, that parent can claim the child as a dependent only if that parent is 95% current on his child support for that tax year.
The court may consider several factors when deciding whether to grant the non-custodial parent the tax deduction, including:
- Whether the non-custodial parent will be paying the majority of the support for the child.
- The incomes of the parties.
- The tax consequences for each parent.
The court could hold the custodial parent in contempt of court for refusing to follow a court order. The court could also lower the non-custodial parent’s child support payment based upon the extra taxes the non-custodial parent would have to pay without the child deduction.