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Who Claims the Kids on Taxes After Divorce in Illinois?

 

Claiming a child on your taxes can be as valuable as cash. While often overlooked, it shouldn’t be. Parents should not automatically give up the right to claim their children just because the other parent has more parenting time or earns more income.

 

Below, I explain how it works in Illinois, what happens if you don’t have an agreement, and how tax law interacts with your divorce judgment.

 

Who Gets to Claim the Child? 

 

In Illinois, the rules for claiming children on taxes are fairly straightforward:

  • If the parties agree, that agreement becomes part of the court’s final order.

  • If the parties don’t agree, the judge will usually:

    • Order an alternating year schedule (e.g., one parent claims the child in even years, the other in odd years).

    • Split claims if there are multiple children (e.g., each parent claims one child).

    • Require that child support be current before a parent can claim the child.

 

Important: If there's no agreement or order, the parent with the majority of parenting time gets to claim the child by default.

Statutory Reference: “Unless a court has determined otherwise or the parties otherwise agree, the party with the majority of parenting time shall be deemed entitled to claim the dependency exemption for the parties’ minor child.” 750 ILCS 5/505(a)(3)(C)(I)

 

Can the Court Award the Tax Deduction to the Other Parent?

 

Yes. Illinois courts have the authority to allocate the tax exemption to either parent.

Case Law Examples:

  • In re Marriage of Fowler, the court confirmed it has jurisdiction to award the exemption to the non-custodial parent.

  • In re Marriage of Watkins, the court can require the custodial parent to sign an IRS form (Form 8332) allowing the other parent to claim the exemption.

  • In re Marriage of Einhorn, such an order must include a condition that child support is current.

 

What If Parenting Time is 50/50?

 

If both parents have equal parenting time and there is no court order, the parent with the higher adjusted gross income (AGI) gets to claim the child. Federal Rule: I.R.C. § 152(c)(4)(A)(ii)

 

What Changed with the 2017 Tax Reform?

 

The Tax Cuts and Jobs Act of 2017 significantly changed how claiming children on taxes works:

  • The personal exemption for each child is gone.

  • Instead, there is a Child Tax Credit of up to $2,000 per child.

    • This is a credit, not a deduction — it reduces what you owe in taxes, dollar-for-dollar.

    • If you owe $5,000 and have two children, you could owe only $1,000 after applying the credit.

    • If your credit exceeds your tax liability, you won’t get a refund for the extra amount.

 

Child Tax Credit: Income Limits

You can only claim the full Child Tax Credit if your income is below:

  • $400,000 (for married couples filing jointly)

  • $200,000 (for all other filers)

Above those limits, the credit phases out.

 

What is the Earned Income Tax Credit (EITC)

Parents earning between $40,000 to $50,000 (depending on the number of children) may qualify for the Earned Income Tax Credit, which can be worth up to $6,431 (2018 figures). This is especially important for lower-income parents.

 

What is Head of Household Status

If you're unmarried and paying more than half the cost of keeping up a home, you may qualify as Head of Household, which gives you a larger standard deduction (around $18,000) and better tax brackets.

You are considered unmarried for the year if:

  • You obtained a final divorce decree or separate maintenance decree before December 31st.

See IRS Publication 504 for more on this.

 

IRS Requirements: Claiming as the Non-Custodial Parent

To legally claim a child as the non-custodial parent, the following must be true:

  • You are divorced or legally separated.

  • The child lived with one or both parents for more than half the year.

  • The child received over half of their support from the parents.

  • The custodial parent must sign IRS Form 8332 (or a similar statement) giving up the exemption.

  • The non-custodial parent must attach that form to their tax return.

See IRS Publications 504 and 596 for more details.

 

What Do Most Judges Do in Practice?

 

In Illinois courts, judges often take a practical approach:

  • With one child: Parents alternate years.

  • With two children: Each parent claims one.

  • With three children: Each parent claims one and they alternate the third.

  • With four children: Two each, and so on.

This method is not law, but it is common practice unless a parent is behind on child support or there are other special circumstances.

 

Final Note: Talk to Your Divorce Lawyer

While divorce lawyers aren’t tax experts, they should be familiar with how child-related tax issues play into divorce settlements. Make sure your attorney knows you want to retain your right to claim your child on taxes — especially before finalizing any agreements.

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