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On December 22, 2017, Congress approved the Tax Cuts and Jobs Act (TCJA), that made changes to the Internal Revenue Code that will significantly affect child tax credits. Beginning this year, there are changes to the child tax credit that may materially impact the tax benefits of divorced and/or single parents who are able to claim their child(ren) on their tax returns. This may be a good time to review divorce, paternity, child custody, and child support judgements that indicate which parent may claim the children for tax purposes. With resulting changes to taxable income, it may be beneficial to renegotiate either child support or tax treatment of children. This can be accomplished with the assistance of an experienced family law attorney and your accountant.

Many judgments of divorce, paternity, child custody, child visitation, child support or related modification judgments provide for which parent gets to claim the child(ren) on their tax returns. Often if there is more than one child the deductions or credits are split equally between the parents.

Before the TCJA, the child tax credit was potentially worth up to $1,000 per child, if the parent(s) were eligible. This was a credit only and was not refundable. The TCJA doubles the tax credit for 2018 to $2,000 per child. Up to $1,400 of the credit amount is now also refundable, unlike previous years. Unfortunately, these changes may not result in a lower tax bill or higher tax refund for all eligible parents as the TCJA also eliminates the personal exemption for every taxpayer and each of their dependents (children).

If the tax advantage of being able to claim the child credit now differs materially as a result of the changes in the tax laws or the financial situations of either parent, it may be possible to negotiate a better agreement with regard to child support and child tax credits with the assistance of experienced legal representation.

If you wish to explore the modification of your current child support order or modify your judgment with regard to the parent who gets to claim the child for tax purposes, please call to schedule a consultation.

For more information please visit:

https://www.irs.gov/help/ita/is-my-child-a-qualifying-child-for-the-child-tax-credit