January 19

What is the Child Tax Exemption?

The Child Tax Credit (CTC) is a tax credit that allows parents to claim the cost of caring for their children. This credit can reduce a taxpayer’s taxable income dollar-for-dollar. In most cases, it is given to the parent who spends the most time with the child throughout the year.

How does the child tax exemption work in Reno, Nevada?

There are several situations where the custodial parent may not be eligible for the CTC. For example, an unmarried parent is generally not entitled to the CTC if he or she has not provided more than half of the costs associated with the household. A family law attorney can help you determine if you are eligible for the Child Tax Credit.

Depending on the circumstances, the custodial parent may revoke the dependent exemption. To do so, the custodial parent must complete an IRS Form 8332. He or she must also provide a signed waiver that states that he or she will not claim the dependent exemption. The noncustodial parent may choose to file a tax return and claim the dependent exemption. However, the IRS requires that he or she submit a copy of the revocation before the start of the new tax year.

In addition to being awarded the child tax credit, the custodial parent has a right to be awarded the head-of-household filing status. This is an advantage in that it provides for a larger standard deduction and an increased standard income bracket. If the primary occupant of a home is a custodial parent, the head-of-household status will be granted to him or her.

Another reason that a noncustodial parent is not entitled to the CTC is if he or she is not providing more than half of the costs associated with the child. In some cases, a court may order that the noncustodial parent be required to pay for a percentage of the child’s housing costs. A noncustodial parent might not be eligible for tax credits toward health coverage.

A number of court cases have addressed the issue of whether or not a trial judge has the authority to allocate the federal child tax exemption between two parties. One case shows that a judge must present evidence to demonstrate that a party’s income will be negatively affected by the allocation.

A good family law attorney can help you to avoid a misunderstanding and protect your rights when negotiating a divorce or other separation. They can ensure that the divorce decree reflects the proper language regarding the child tax exemption and the right to claim the child as a dependent.

Richard Davies and his team are here to help you with your child custody case in Reno and Sparks, Nevada. Call today at (775) 360-6894 to schedule your free consultation.


child custody, child tax credit, tax exemption, taxes

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