There are significant benefits to declaring a child on your tax return. However, you can’t get those benefits if someone else has claimed your child on their tax return.
“There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer…an amount equal to $1,000” 26 U.S. Code § 24(a)
That’s a credit! That means that your taxes aren’t just deducted, the government will give a $ 1000 credit against the taxes that you owed…and probably already paid through your paycheck deductions.
After a divorce, parents file their taxes separately and have no control over what the other party puts on their tax return. In a fit of spite or mindlessness, your ex may declare your child on their taxes without you knowing. When a parent inappropriately declares a child on their taxes, the other parent must take steps to undo that declaration and properly declare their child on their own taxes (and get the benefits therefrom).
Who Gets To Declare A Child On Their Taxes After An Illinois Divorce
The Marital Settlement Agreement entered in your divorce will govern who gets to declare the child. Parties typically agree to split the children’s deductions and/or alternate the children’s deductions.
For example, with three children, the language in a Marital Settlement Agreement regarding child dependency might look like this:
“Starting for tax year 2021 and continuing each year thereafter, for federal and state income taxes, Father shall claim the oldest child, Tommy, as a dependent, and Martha will declare the 2nd oldest child, Caroline, as a dependent, and the parties shall alternate years in claiming as a dependent, the youngest child, Gary, with Mother claiming the child for odd-numbered years, and Father claiming the child in even-numbered years. When Tommy reaches the age of 18, Mother will continue to declare Caroline as a dependent and Father will declare Gary as a dependent exclusively. When Caroline reaches the age of 18, Mother will claim Gary as a dependent for odd-numbered years and Father will claim Gary as a dependent for even-numbered years. “
This language be complicated but such language ensures fairness as children leave the home and can control their own dependency declaration after age 18.
The Marital Settlement Agreement should also include the subsequent steps needed to ensure that each parent complies with the agreed declaration schedule.
“From time to time as needed, either party shall execute any documents necessary to effectuate the terms of this paragraph, including but not limited to IRS Form 8332.”
I will discuss these forms later in the article.
If there is no language in a Marital Settlement Agreement as to who declares a child as their dependent, we must rely on the Illinois statute.
“Unless a court has determined otherwise or the parties otherwise agree, the party with the majority of parenting time shall be deemed entitled to claim the dependency exemption for the parties’ minor child.” 750 ILCS 5/505(a)(3)(C)(I)
So, whoever has parenting time with the child for 183 days or more of the year gets to declare that child as their dependent.
A parent who exercises less than majority time with the child can still return to an Illinois domestic relations court and ask a court to allow them to declare the child as a dependent.
“A trial court decidedly has jurisdiction to transfer the dependent child tax exemption from the custodial to the noncustodial parent.” In re Marriage of Fowler, 197 Ill. App. 3d 95, 100 (Ill. App. Ct. 1990)
“The allocation of the tax exemption is an element of child support, subject to the trial court’s discretion. It is within the authority of the trial court to allocate the dependency tax exemption to a noncustodial spouse and to order the custodial parent to sign a declaration for Internal Revenue Service (IRS) purposes that he or she will not claim the exemption.” In re Marriage of Watkins, 2017 IL App (3d) 160645 (Citations Omitted)
Illinois family law court’s preference is to split the deductions for a child equally no matter what the parenting schedule is…so long as the non-custodial parent is current on their child support.
“Such an order must provide that the execution of the declaration is contingent upon the custodial parent’s receipt of child support payments, if the noncustodial parent is ordered to make them.” In re Marriage of Einhorn, 178 Ill. App. 3d 212, 225 (Ill. App. Ct. 1988)
How Do You Enforce Your Right To Declare Your Children On Your Taxes In Illinois?
The IRS will accept a declaration of dependency for a child if the child lived with that parent for more than half the year. The parenting plan will be sufficient proof that a child spent more than half their year with the custodial parent.
A non-custodial parent may declare the child as a dependent on their taxes under the following circumstances
“A child will be treated as the qualifying child of his or her noncustodial parent if all four of the following statements are true. 1. The parents: a. Are divorced or legally separated under a decree of divorce or separate maintenance, b. Are separated under a written separation agreement, or c. Lived apart at all times during the last 6 months of the year, whether or not they are or were married. 2. The child received over half of his or her support for the year from the parents. 3. The child is in the custody of one or both parents for more than half of the year. 4. Either of the following applies. a. The custodial parent signs a written declaration, discussed later, that he or she won’t claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return.” IRS Publication 504 2020.
The non-custodial parent will always need the custodial parent’s permission to declare the child as their dependent. This will require both parents to fill out IRS form 8332 and submit that completed form with the non-custodial parent’s tax return.
If both parents declare the child despite the language (or lack thereof) in the MSA, the IRS may issue refunds reflective of that declaration to either parent, both parents or neither. Your recourse with the IRS will need to be done through an accountant…but you can still go back to family law court in Illinois to resolve the matter.
Contempt Of Court For Declaring A Minor Child As A Dependent After An Illinois Divorce
When someone does anything that is in violation of a court order, which a Marital Settlement Agreement is, they are in indirect civil contempt of court.
“[C]ivil contempts are those prosecuted to enforce the rights of private parties and to compel obedience to orders or decrees for the benefit of opposing parties” Peo. ex Rel. Chi. Bar Assoc. v. Barasch, 21 Ill. 2d 407, 409-10 (Ill. 1961)
The party who was supposed to have the exclusive right to declare the child as a dependent must simply bring the allegation to court.
“The burden initially falls on the petitioner to establish, by a preponderance of the evidence, that the alleged contemnor has violated a court order.” In re Marriage of Knoll, 2016 IL App (1st) 152494, ¶ 50, 65 N.E.3d 878.
The order violator must then prove that they did not, in fact, violate the order.
“Once that burden is satisfied, the burden shifts to the contemnor, who has the burden of showing that the violation was not willful and contumacious and that he or she had a valid excuse for failing to follow the order.” In re Marriage of Knoll, 2016 IL App (1st) 152494, ¶ 50, 65 N.E.3d 878.
The judge will simply order the person who improperly declared the child to properly amend and refile their taxes.
The violator will then likely owe the IRS additional money AND have to pay the other parent for the attorney’s fees that were required to fix the error.
“In every proceeding for the enforcement of an order or judgment when the court finds that the failure to comply with the order or judgment was without compelling cause or justification, the court shall order the party against whom the proceeding is brought to pay promptly the costs and reasonable attorney’s fees of the prevailing party.” 750 ILCS 508(b).
From both parties’ perspectives, going to court is a lot of work to enforce or defend an allocation of the right to declare a child a dependent on your taxes that has a maximum value of $ 1000. Still, you have to draw a line in the sand somewhere.
If you’d like to discuss how to properly enforce your final divorce judgment and properly declare your children as dependents, contact my Chicago, Illinois family law firm to schedule a free consultation with an Illinois divorce attorney.