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Ask Carolyn: Who Gets the Dependency Exemptions?

Carolyn Woodruff, J.D., C.P.A, C.V.A.

Dear Carolyn:

My ex and I share the children fifty-fifty.  We have three children.  I make approximately $25,000 more than the other parent.  I pay child support even though I have them half the time.  Our child support order says nothing about who gets the dependency exemptions, and I get in a fight with my ex every year over the dependency exemptions.  Who should get the three dependency exemptions?

Carolyn Answers….

First, you need to know that this is a heavily litigated area by the IRS in the US Tax Court.  Second, as a premise, federal law generally prevails over North Carolina law on the doctrine of federal preemption (ie, federal law wins over state law in certain areas).  Third, you need to know that the Child Support Guidelines and the Internal Revenue Code (federal law) have a different result.

The North Carolina Child Support Guidelines state the following:  “This schedule assumes that the parent who receives child support claims the tax exemptions for the child.  If the parent who receives child support has minimal or no-income tax liability, the court may consider requiring the custodial parent to assign the exemption to the support parent and deviate from the guidelines.”  Your ex receives child support, so the assumption is that your ex gets the exemptions.  You do not say whether your spouse has minimal income so I cannot address this point.  The good news is that your child support order does not address this, so you cannot be held in contempt of the court order for child support if you take the exemptions.  A mere assumption under the North Carolina Guidelines should not be grounds for holding you in contempt.  The order would have to be clear on the exemption issue.

Under federal law (Internal Revenue Code), you get the dependency exemptions under the tie breaking rule.  The federal tie breaking rule says that the parent with the greater adjusted gross income is allowed to claim the dependency rules if the children are spending an equal amount of time with both parents.  Remember, I said that federal law controls over state law.

All this said, your ex and you will be explaining the situation to the Internal Revenue Services, if both of you take all of the exemptions.  The IRS may even look into the actual overnights of residence with each parent even though the order says you have equal time.  You should try to reach an agreement with your ex.  Each exemption is worth a deduction of $3900 in 2013 and $3950 for 2014.


Have Family Law Questions?

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Note that the answers in “Ask Carolyn” are intended to provide general legal information, and the answers are not specific legal advice for your situation.  The column also uses hypothetical questions.  A subtle fact in your unique case may determine the legal advice you need in your unique case.  Also, please note that you are not creating an attorney-client relationship with Carolyn J. Woodruff by writing or having your question answered by “Ask Carolyn.”

This blog revised from a previous column published in the Rhino Times.