Those who have joint custody of a child in Texas may want to know how the IRS views the issue of which parent is able to claim the child as a dependent on their tax return and receive the tax benefits. Many divorcing couples settle this matter in the divorce agreement. However, if they do not agree, there are rules that the IRS uses to determine who gets the tax break.
Only one parent can receive tax benefits, and the IRS will verify the child’s Social Security number. The first thing that the IRS will look at is the custody ratio and which parent has more time with the child. The IRS may award the ability to deduct to the parent with more time.
However, the IRS may also look at the incomes of both of the parents. If the child lives with each parent for exactly the same amount of time each year, the IRS will use the adjusted gross income as the tiebreaker. Parents can fill out an IRS form that allows the other parent who would ordinarily not have the right to claim the child the ability to do so. Of course, the parents are best advised to work this matter out on their own because if both of them try to claim the child, it may spark an audit of both parents.
A parent may retain the services of a child custody and support lawyer in order to negotiate with the other parent. Being able to deduct the child as a dependent may be used as a bargaining chip in the negotiation of the divorce agreement. A court may also decide the matter if settlement terms are imposed, and the judge may not always follow the rules that the IRS uses to determine who gets the credit.