If you’re getting divorced, taxes may be the last thing on your mind. Nonetheless, a life event such as separation or divorce has many tax implications.
It is the year when your divorce decree becomes final that you lose the joint return option. In other words, your marital status as of December 31 of each year controls your filing status for that entire year. Couples who are splitting up, but not yet divorced before the end of the year, have the option of filing a joint return. The alternative is to file as married filing separately. If you cannot file a joint return for the year because you are divorced by year’s end, you can file as a head of household.
Only one taxpayer may generally claim any one person as a dependent on a tax return (except in the case of a married couple filing married filing jointly). You can continue to claim your child as a dependent on your tax return if he or she lived with you for a longer period of time during the year than with your former spouse. In this case, you’re called the “custodial parent”. It is possible for the non-custodial parent to claim the exemption for a dependent child if the custodial parent signs a waiver pledging that he or she won’t claim the child.
Sometimes, a parent will claim the dependency tax exemption when they are not entitled to it. If your former spouse files his/her tax return before you do, it is possible that he/she would be allowed the exemption, at least temporarily. Once the IRS looks at your return and detect a duplicate Social Security number (your child’s) being claimed by another taxpayer, the situation changes. If you file your tax return and someone else has already claimed your dependent, then the IRS will apply “tie-breaker rules”.
The IRS tie-breaker rules are applied in the following order: