Child support and the dependency exemption: Who claims the child?

In a divorce with children, the issue of child support arises, generally, very quickly.  I’ve written about child support before, but today wanted to tackle the issue of the dependency exemption.  There are still many couples that have one parent as the primary wage-earner and one parent who is the primary child care provider.  In the event of a divorce, the wage-earner finds him- or herself trying to balance work and child rearing, and the child care provider must face both sharing the joys and obligations of child upbringing as well as heading out into the job market.

In a first divorce hearing in California when the couple has children, the issue of child support is frequently on the table.  In California, child support is calculated using a software program, and the two main factors considered are timeshare spent with the child(ren) (stated as a percentage) as well as each party’s income.  Once child custody and visitation is worked out, at least on a temporary basis, then child support can be calculated.  Often, the higher wage-earner is looking to claim the child for tax purposes because the higher wage-earner will receive a higher benefit from that exemption.

What may be unclear to both parties, however, is the way child support is calculated in California.  The software program takes each party’s gross income (that’s income before taxes) and the program itself calculates your taxes.  Therefore, the program is designed to know which party will receive the highest benefit from the child exemption as well as what the benefit is.  In California, too, it is presumed that the parent with the highest percentage of timeshare with the child will receive the tax exemption.  This presumption can be shifted to the lower-timeshare parent, however not without consequences.  Because the dependency exemption confers a benefit on the party who claims it, generally when the lower-timeshare parent claims the child, this results in a higher dollar amount of child support paid.

Therein lies the rub.  I have had many clients who have insisted that they claim the child for tax purposes, but once the amount of increase in child support becomes clear, their tune changes instantly.  In cases where the lower wage earner makes little to nothing, however, most courts will generally order the dependency shift because the lower earner gets no or almost no benefit from the exemption.

Which would you prefer?  A lower monthly amount of child support or the dependency exemption?  In most cases, it depends on the specifics of the situation, timeshare, and incomes…yet another reason why there are no “easy” divorces.

One Response to “Child support and the dependency exemption: Who claims the child?”

  1. Getting a divorce? Tax tips « McPherson Law Group. Estate Planning & Divorce Law. Unlike any attorneys you've ever met. Says:

    […] don’t often write about taxes, but today seems to be tax day, with my last post about the dependency exemption in child support.  It is a common question from my divorcing clients regarding the timing for divorce filing on […]


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