Your divorce has been finalized and the Georgia family court has determined that you are not the custodial parent because your child spends a little more than half of his or her time with your ex. Beyond the disappointment of being separated from your child, many Marietta parents who don’t have primary physical custody are concerned that they will lose out on all of their tax deductions. Luckily, however, this is not always true.
There is an exception to the presumption that the custodial parent will reap all of the tax rewards of having primary physical custody called the noncustodial parent rule. If the noncustodial parent meets all of the elements of the noncustodial parent rule, which will be covered in part II, he or she can take advantage of numerous tax benefits.
One of the biggest deductions that a parent can take advantage of is the tuition deduction. A parent of a college-age child can deduct up to $4,000 for any money he or she has spent on his or her child’s college fees or tuition. The parent can also claim $2,500 if he or she has paid down some of the child’s student loan interest. While both of these tax deductions are available under the noncustodial parent rule, many of them are also subject to being phased out for higher income brackets.
Even though student-related deductions may actually be the most beneficial to parents, most parents in Marietta and across the country are most often worried about the dependency exemption deduction. In 2012, noncustodial parents could lose a $3,800 deduction if they have not overcome the presumption that the custodial parent should get the deduction.
As both custodial and noncustodial parents try to determine which tax credits they can receive, it is important that both parents talk to a divorce and child custody attorney who can help to clarify some of these complicated rules.
Source: Smart Money, “Child-Related Tax Breaks After Divorce,” Bill Bischoff, March 28, 2012