Divorce and Dependents: Who Claims the Kids?

It can get messy if both parents try to claim the dependency exemption.

If you are divorced and have children, only one parent can claim the dependency exemption worth $3,300 each qualifying child on 2006 tax returns. The parent who claims the dependency exemption is also entitled to the $1,000-per-child tax credit for kids under 17, assuming your income is not too high. (You lose some or all of the credit if you file a married filing separately return and your income exceeds $55,000 or claim head of household status and your income tops $75,000.)

Normally, who gets to claim a child as a dependent is a pretty straight-forward decision. Either your divorce decree names the custodial parent. If your divorce documents are silent on the issue, then it's a simply matter of time: You are considered the custodial parent if you child lived with you for a longer period during the year than with your ex.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance