Tax Time Tips – Splitting Credits

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Parents who share custody of a child are tied together throughout a child’s lifetime. Tax time is no different. With a dizzying amount of credits and deductions in regards to children, parents can have a tough time determining who gets what.

Tax Time Tips – Splitting Credits

Parents who share custody of a child are tied together throughout a child’s lifetime. Tax time is no different. With a dizzying amount of credits and deductions in regards to children, parents can have a tough time determining who gets what.

"The custodial parent gets the credits, right?"

Not always. Credits and deductions can be split between the custodial and non-custodial parent for maximum financial benefit to both parents. Another option is to rotate deduction/credit claims each year.
A child tax credit is a nonrefundable credit (meaning it won’t take your tax liability past zero) of up to $1000 for each qualifying child. A qualifying child defined as a) the taxpayer’s son, daughter, stepchild, eligible foster child, sibling or a descent of the previous relatives b) Under age 17 at the end of 2008 c) a US citizen, US national or resident of the US d) did not provide over half of his/her own support in 2008 and e) lived with taxpayer more than half of 2008

Point E is where splitting credits comes into play. A non-custodial parent can take the credit if all of the following apply:

  • The parents are divorced, legally separated, separated under a written separation agreement, or lived apart at all times during the last 6 months of 2008.
  • The child received over half of his/her support from the parent. Support of a child from the parent’s spouse is traded as provided by the parent.
  • This child is in the custody of one or both of the parents for more than half the year

Either the following applies:

  • The custodial parent signs Form 8332 (states that he/she will not claim the child as a dependent for 2008)
  • A divorce decree or separation agreement between the parents dictates who can claim the child as a dependent.

Other credits to consider are Earned Income Credit and Dependent Care Credit. Using a qualified tax preparer can help you and your ex determine the best ways to split credits and dependent claims for the maximum financial benefit for both parties.


For more information, contact your local Liberty Tax Service or in Plano or Frisco contact Liberty Tax Plano at 469-467-1102. For more timely parenting tips and solutions, visit www.theparenthive.com.

Richard JaramilloRichard “RJ” Jaramillo, is the Founder of SingleDad.com,
a website and social media resource dedicated to single parenting and specifically for the newly divorced, re-married, widowed and single Father with children.
RJ is self employed, entrepreneur living in San Diego and a father of three children. The mission of SingleDad is to help the community of Single Parents
“Make Life Happen…Again!”

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Richard “RJ” Jaramillo, is the Founder of SingleDad.com, a website and social media resource dedicated to single parenting and specifically for the newly divorced, re-married, widowed and single Father with children. RJ is self employed, entrepreneur living in San Diego and a father of three children. The mission of SingleDad is to help the community of Single Parents “Make Life Happen…Again!”