A married couple can jointly claim children as dependents on their tax returns, and this is a simple and straightforward process. For divorced couples, however, there are many different answers to the question of who takes the claim. In a very broad sense, if the parents cannot agree on an arrangement, the IRS decrees that the parent who paid for more than half of the child's support during the year is the parent legally entitled to the exemption. This means that if you were awarded custody in your child custody case, you should be able to make the claim. The IRS provides a mathematical worksheet to help determine the answer to this issue should there be dispute about it. It is referred to as the Member of Household or Relationship Test.
Determining Whether a Child is Your Dependent
Factors that go into deciding who claims a child as a dependent include:
Essentially, this generally means that unless another arrangement has been worked out during child custody proceedings, you will be claiming your child as a dependent if you have custody of him. Whenever possible, however, it is a benefit to the parents to clearly work out amongst themselves who will claim the child. Creating an agreement will not only help you avoid distressing arguments over the child, but it is also the course of action that makes the most sense.
Parents who make a mutual decision on child custody can benefit the most financially, by deciding based on which side would result in a larger return. They may also simply choose to trade off each year. It's not a bad idea to put such an agreement in writing.